Nike is on the rise as more analysts join Jim Cramer in expressing confidence in CEO Elliott Hill’s efforts to turn around the struggling iconic brand. Wells Fargo upgraded Nike from hold to buy on Thursday, citing an improved outlook for the company’s future. Analysts also raised their price target to $75 per share from $60, implying a 13% update from Thursday afternoon’s stock price. A key part of Wells Fargo’s investment thesis is Mr. Hill’s return and plans to refocus the company on sports, revive innovation and restore relationships with wholesale and retail partners after his predecessor stuck with direct-to-consumer sales for too long post-coronavirus. Jim agrees and has stayed ahead of the curve. “We’ve had a much better relationship” with Hill, who came out of retirement to become CEO more than a year ago, Jim said at the club’s November meeting for club members on Thursday. He joined Nike as an intern in 1988 and rose through the ranks during his more than 30-year career with the company, holding numerous executive positions. “I’ve spent a lot of time with Elliott Hill. He’s an athlete,” Jim said. “I think the quarter is actually going well,” Jim emphasized. With major global marketing opportunities ahead, including next year’s Men’s Soccer World Cup, he said he has confidence in Hill’s ability to continue moving forward in Nike’s turnaround. “We started talking about the World Cup. That’s always been the reason I bought Nike. I’ve done it over and over again,” Jim said. Nike is scheduled to announce its second quarter 2026 financial results next month. The stock price soared after the announcement of its financial results on September 30th, but has since fallen. The company’s stock is on a three-session winning streak, but is still down nearly 13% year-to-date. NKE YTD Mountain Nike YTD Sounding similarly bullish to Bank of America’s bullish tone earlier this week, Wells Fargo also said that Nike’s inventory headwinds are dissipating and that the company “could see revenue growth of 3% to 4% in fiscal 2026.” It’s no secret that overstocks of Nike’s classic sneakers, like the Air Force 1, Air Jordan 1, and Dunk, have been hurting the company’s finances for some time. Wells Fargo analysts estimate that once the dust settles, “Nike will absorb a total of $6 billion in headwinds from the market cleansing of these three classic franchises.” But things are starting to look up for Nike. Wells Fargo noted that sales outside of these traditional franchises are up more than 20%. Analysts said Nike’s revamped Vomero and Pegasus lines are boosting sales volumes. Additionally, he said North American margins should increase as Nike moves away from deep wholesale discounts and prices stabilize. Nike Direct, Nike’s own digital platform, has also seen improvements in average selling price and list selling price. China remains a problem for Nike, with sales in the region declining as Chinese consumers remain cautious with their spending. Nike is currently clearing inventory in the world’s second-largest economy, which analysts expect will continue until mid-2026. The club has a rating of “1” on Nike, equivalent to “buy,” and a price target of $80 per share. We started our Nike position on September 26th and have purchased three more times since then. My last purchase was on October 31st. (Jim Cramer’s Charitable Trust is a long NKE. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
