Nike stock skyrockets 15% as Wall Street calls it a ‘recovery story in motion’ after surprise earnings beat: Nike Inc. (NKE) stock surged nearly 15% on Thursday, marking its largest single-day gain since the pandemic recovery of 2020. The rally comes in response to the company's stronger-than-expected Q4 earnings and a focused plan to revive growth, streamline costs, and reduce exposure to China amid growing trade tensions.
Nike reported earnings of $0.14 per share on revenue of $11.4 billion, beating analysts’ lowered estimates of $0.13 EPS on $11.0 billion in sales. While revenue dropped 2% year-over-year, the company outperformed in North America and managed to hold margins steady despite heavy discounting.
2. Solid forward guidance
For fiscal Q1, Nike expects revenue to decline by only mid-single digits, a less severe contraction than many analysts anticipated. Moreover, gross margins are projected to improve between 50–70 basis points, driven by fewer discounts and leaner inventories.
Also Read: US stock market hits new record: S&P 500 live updates: All 3 indices hit record highs as Trump–China trade deal lifts Wall Street, AI stocks surge
Nike addressed investor concerns about tariffs and Trump-era trade policies by announcing it will reduce sourcing from China from 16% to below 10% by fiscal 2026. This move is designed to protect margins and diversify the supply chain.
4. Refocus on innovation & core categories
Nike is doubling down on performance categories like running, basketball, and women’s apparel, with product lines such as Pegasus 41 and Alphafly 3 seeing strong early demand. The company aims to launch 25% more new products in FY2026 to reinvigorate brand momentum.
Looking ahead, Nike expects full-year FY2026 to return to low-single-digit revenue growth and margin expansion. The company also plans to repurchase $5 billion in shares over the next 18 months, a strong signal of internal confidence.
Nike’s explosive 15% rally is more than a bounce—it's a reflection of renewed investor belief in its turnaround story. With aggressive supply chain moves, revitalized product lines, and early signs of stabilization, Nike could be on track to reclaim its leadership stride in the global athletic market. Investors will be watching closely in the next two quarters for proof that this momentum is sustainable.
Nike stock surged after an earnings beat and a clear turnaround plan that impressed investors.
Q2: Is Nike a good buy right now?
Analysts are turning bullish, calling Nike a recovery story and a possible buy opportunity.
What triggered Nike’s 15% surge?
1. Q4 earnings beat estimatesNike reported earnings of $0.14 per share on revenue of $11.4 billion, beating analysts’ lowered estimates of $0.13 EPS on $11.0 billion in sales. While revenue dropped 2% year-over-year, the company outperformed in North America and managed to hold margins steady despite heavy discounting.
2. Solid forward guidance
For fiscal Q1, Nike expects revenue to decline by only mid-single digits, a less severe contraction than many analysts anticipated. Moreover, gross margins are projected to improve between 50–70 basis points, driven by fewer discounts and leaner inventories.
Also Read: US stock market hits new record: S&P 500 live updates: All 3 indices hit record highs as Trump–China trade deal lifts Wall Street, AI stocks surge
Key business shifts boosting confidence
3. China exposure being scaled downNike addressed investor concerns about tariffs and Trump-era trade policies by announcing it will reduce sourcing from China from 16% to below 10% by fiscal 2026. This move is designed to protect margins and diversify the supply chain.
4. Refocus on innovation & core categories
Nike is doubling down on performance categories like running, basketball, and women’s apparel, with product lines such as Pegasus 41 and Alphafly 3 seeing strong early demand. The company aims to launch 25% more new products in FY2026 to reinvigorate brand momentum.
Analyst upgrades and valuation outlook
Wall Street responded swiftly.- Jefferies upgraded Nike to Buy, calling the stock a “recovery story in motion.”
- JPMorgan raised its price target from $80 to $94, citing better inventory control and China de-risking.
- BofA and HSBC echoed positive sentiment, with revised targets ranging from $88 to $100.
Looking ahead, Nike expects full-year FY2026 to return to low-single-digit revenue growth and margin expansion. The company also plans to repurchase $5 billion in shares over the next 18 months, a strong signal of internal confidence.
Nike’s explosive 15% rally is more than a bounce—it's a reflection of renewed investor belief in its turnaround story. With aggressive supply chain moves, revitalized product lines, and early signs of stabilization, Nike could be on track to reclaim its leadership stride in the global athletic market. Investors will be watching closely in the next two quarters for proof that this momentum is sustainable.
FAQs:
Q1: Why did Nike stock jump 15% today?Nike stock surged after an earnings beat and a clear turnaround plan that impressed investors.
Q2: Is Nike a good buy right now?
Analysts are turning bullish, calling Nike a recovery story and a possible buy opportunity.
