Barclays Sees Light at the End of Nike's Tunnel
Nike (NKE) has faced a challenging year, with its stock down 47% in 2026 and 77% over five years, hitting its lowest level in 13 years. Despite this, Barclays maintains a Buy rating, arguing that the worst may finally be over for the athletic wear giant.
The company's latest earnings report showed revenue falling 4% year-over-year to $11.21 billion, missing estimates of $11.32 billion. Earnings per share were $0.48, slightly above the $0.43 consensus. Barclays lowered its price target to $37 from $48 but kept its positive outlook.
Nike's turnaround plan, led by CEO Elliott Hill, includes job cuts in 2027 and a focus on improving profitability. However, the outlook remains tough, with management expecting fiscal 2027 revenue to decline by a high-single-digit percentage. China continues to be a major challenge, with sales there dropping 26% in the fiscal first quarter.
Barclays' call is a bet on stabilization rather than current momentum. The next test for Nike will be whether it can show improving sales and margins without another significant reset in expectations.