KeyBanc Capital Markets raised its rating on Nike (NYSE:NKE) to Overweight, pointing to encouraging early progress under the sportswear giant’s “Win Now” recovery plan after a stronger-than-expected first quarter.
Analysts noted that execution is improving in several key segments, particularly running, North America, and wholesale distribution. Sales in the running category climbed more than 20%, revenue in North America grew 4%, and wholesale sales advanced 7%. They added that new product frameworks, a healthier marketplace, and leaner inventories suggest the turnaround is gaining traction.
Nike emphasized its deepening innovation pipeline and said spring order volumes were up year-over-year, signaling more growth potential ahead. The company has restructured its running business into three product tiers, enabling a major new shoe release each season.
That model will also be rolled out across football, basketball, and other divisions as Nike seeks to engage younger consumers. The company also indicated that stabilization is approaching for legacy lines like the Air Force 1 and Air Jordan 1, while it intentionally scales back the Dunk franchise.
“While we acknowledge some NT choppiness remains from tariffs, digital, and China, we believe that the Sport Offense, innovation pipeline, and marketplace resets will continue to better position Nike for a return to sustainable growth/margin recovery,” analysts wrote.
The team acknowledged prior concerns around Nike’s digital strategy and China performance but said recent progress gives them confidence in a rebound. First-quarter revenue came in at $11.7 billion, up 1.1% and ahead of consensus estimates, while earnings per share of 49 cents comfortably topped forecasts of 27 cents.
Looking ahead, Nike guided for a low-single-digit revenue decline in the second quarter but maintained that incoming orders and upcoming product launches point to a stronger back half of the year. KeyBanc set a $90 price target on the stock.
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