Sports apparel maker Nike ended the last trading week among the worst-performing stocks on the S&P 500 over the past decade, falling nearly 80% from its all-time while while trading at a 12-year low.
On Sept. 4, the S&P Dow Jones Indices announced that Nike will be dropping out of the S&P 100 before trading opens on Sept. 21, which caused the stock to move even lower, though marginally, on Tuesday, Sept. 8, the first day of trading after the Labor Day holiday weekend.
Nike shares were down 0.4% to $38.25 at last check the afternoon of Sept. 8, but analysts at Needham see Nike’s downturn as a buying opportunity for a stock it believes will double from its current low.
Needham doubles down on Nike
Needham analyst Tom Nikic has a buy rating and $75 price target on Nike, according to a note viewed by Yahoo Finance this week.
While that may seem impossible, considering how far the stock has fallen over the past year, Nikic says three pillars support his argument: wholesale channel realignment, franchise cleansing, and a strategic rating tied to CEO Elliott Hill’s operational pivot.
Nike used to be praised for moving toward an online direct-to-consumer sales model, but these days, investors want to see the company maintain shelf space at its distribution partners’ stores.
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Nike retail comps at Foot Locker turned positive for the first time in four years during its last fiscal quarter, and North America wholesale grew 10%. Needham analysts are also seeing renewed shelf space at Dick’s Sporting Goods, Foot Locker, and specialty running stores.
Cleansing franchises has been tougher for Nike, which pulled about $2 billion of classic footwear off shelves in fiscal 2026 as it cleared space for performance platforms like Vomero and Pegasus.
But Nike Sportswear and Jordan Streetwear, which combined account for about half of Nike’s total revenue, are expected to stay negative through the first half of fiscal 2027.
“Nike looks compelling at these levels if Elliott Hill’s Win Now reset actually sunsets on schedule and North America wholesale momentum proves durable,” said Alex Sirois of Yahoo Finance.
“The bull path is clean: Foot Locker and Dick’s shelves fill with fresh performance product, Vomero and Pegasus scale, China stops sliding, and the November investor day delivers a growth framework worth re-rating on. Get those, and Needham’s $75 stops looking heroic.”
Why is Nike stock in the dumps?
Wall Street analysts initially lauded Nike’s plan to shift its sales focus away from retail partners toward a direct-to-consumer model. But no one, not Nike or the analysts, foresaw what that shift would mean for Nike’s visibility in the market.
With more shelf space in the public square being dedicated to its rivals, Nike lost market share on the much bigger cohort of shoppers that don’t go directly to its online stores.
Nike’s revenue has dropped from $51.2 billion in fiscal 2023 (ended in May) to $46.4 billion in fiscal 2026. Moreover, its operating margin has narrowed from 15.6% in fiscal 2021 to 8.2% in fiscal 2026.
In fiscal Q4 of 2026, Nike posted revenue of $11 billion, down 1% on a reported basis and 4% on an adjusted basis.
Diluted earnings per share of $0.72 looked strong on paper, but that number was inflated by a $0.52 per share one-time benefit tied to an expected tariff recovery.
“No hints yet that revenues can turn positive in the foreseeable future; we don’t see a clear reason to expand the P/E ratio from here (from 22x FY27 consensus EPS),” Evercore ISI analyst Michael Binetti recently said.
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