Nike's Turnaround: If the Shoe Fits, Buy It!

Core Insights - Nike's turnaround is showing signs of progress, with the FQ1 report indicating potential for growth and a rebound in share prices [1][3] - The company's "Win Now" plan focuses on core markets, leading to a 7% increase in wholesale sales, although direct sales declined by 4% [2] - Analysts are optimistic about Nike's recovery, with a consensus price target of $81.57, indicating a 9.90% upside from the current price [5][6] Financial Performance - In FQ1, Nike's revenue grew by nearly 1.0%, surpassing market expectations by 650 basis points, driven by a 2% increase in the core Nike brand [3] - Converse sales, however, saw a significant decline of 27%, impacting overall performance [3] - The gross margin contracted by over 300 basis points due to discounts and tariffs, but there is an expectation for margin recovery over time [4] Analyst Sentiment - Analyst sentiment is shifting positively, with 70% of ratings classified as Buy and no sell ratings, indicating a bullish outlook [6][7] - Institutions are actively buying shares, with a buying ratio of approximately $2 to $1 compared to sellers [8] - The consensus is that Nike is on track to regain business momentum and create shareholder value over time [7] Stock Price Movement - Following the FQ1 earnings release, Nike's stock price advanced by 5%, suggesting a potential retest of long-term highs [9] - Analysts predict that the stock could reach the $90 range by the end of the year as turnaround efforts gain traction [9]