Nike Stock: The Mother of All Comebacks Might Have Just Begun

June 27, 2025 at 08:58 AM EDT

Nike Shoe

After a brutal 60% drawdown from its 2021 all-time highs, Nike Inc (NYSE: NKE) just reminded Wall Street why it's still a stock to watch. Shares were up nearly 10% in pre-market trading on Friday following Thursday evening's earnings report that came in much better than feared.

For investors wondering whether the long decline had further to run, this morning's price action suggests the answer is a very definitive "no."

The report showed both earnings and revenue beat expectations, and while the top line still declined year-over-year, there were plenty of bright spots throughout.

With the stock on the verge of having one of its better sessions of the year, could we be looking at the start of the mother of all comebacks?

A Good Start, But More to Do

Nike's Q4 revenue and profit may have contracted from the prior year, but the drop wasn't nearly as bad as expected. Crucially, it landed above consensus on both metrics. The North America, China, and EMEA segments, critical growth drivers, all delivered results in line with internal guidance.

A notable tailwind was the promotional pricing on core footwear lines, which helped move inventory and buoy margins.

Recently promoted CEO Elliott Hill struck a confident but stern note in his statement and veered away from overhyping the situation, saying that "while our financial results are in line with our expectations, they are not where we want them to be." But what came next was the pivot.

Hill emphasized a new strategic realignment, with the goal of rebuilding Nike's product portfolio around performance, storytelling, and distribution. The language and the tone were clear: this is a reset, but you should still be getting excited.

Tariffs and China in the Rearview?

One of the more bullish takeaways from the report, and something the market clearly liked, was Nike's plan to reduce its reliance on China for manufacturing. The company warned that existing tariffs could add as much as $1 billion in costs, so it's moving production elsewhere.

This should help ease investor concerns about geopolitical exposure and improve cost visibility over the medium term.

Hill noted the momentum they're seeing across the board and said the company expects that to continue through the next year. Coming from a CEO who just stepped into the role, this kind of forward-looking confidence carries weight.

Analysts Rush Back In

The reaction from Wall Street has been overwhelmingly bullish, too. On Friday morning, HSBC joined the chorus with an outright upgrade to Buy and a fresh $80 price target, echoing the stances taken by Truist Financial and Evercore ISI earlier this week. That's a big change in tone from recent months, where sentiment had soured across the board. Today's moves suggest the tide is finally turning.

HSBC cited "tangible evidence" that Nike is on a near-term path to sales recovery, even with macro headwinds still lingering. And their $80 price target suggests we could be looking at upwards of 30% upside from where the stock closed on Thursday.

From Beaten Down to Breakout?

Technically, the gap higher on Friday is massive and telling. The stock is now above its 50-day moving average and could open right around the 200-day, a level it hasn't been near in a while. The bulls will want to see follow-through into next week, but after getting a base that's taken nearly a year to form, this could be the turnaround they've been waiting for.

More importantly, Nike's stock has held every higher low since the April bottom, signaling a broader shift in sentiment. If momentum continues into next week and the analysts keep upgrading, there's every reason to believe the worst is over and it's all up from here.

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