Nike's Leadership Change and Earnings Outlook

Nike’s newly-appointed CEO, Eliott Hill, faces challenges as the company warns of significant revenue drops. Hill, an insider who joined as an intern in 1988, succeeds John Donahoe.

The leadership change comes alongside Nike's decision to withdraw its annual revenue forecast, predicting an 8% to 10% decline in the November quarter. Analysts from Stifel express cautious optimism about an insider leading the company but highlight that it remains in 'reset mode'. They note that revitalizing the company culture and brand momentum will take time.

The analysts indicated that supporting a bullish case for the stock from current levels is challenging without clear signs of improved revenue stabilization. They raised concerns that Nike may miss its earnings estimates for the November quarter due to unfavorable foreign exchange conditions and sluggish sales, particularly in China.

Looking ahead, Stifel anticipates 2025 will be a transitional year for Nike, with increased promotional efforts needed to tackle rising competition and weak sales. The firm maintains a Hold rating on Nike with a target price of $79.00, slightly above the recent close of $78.85.