Nike: new CEO Eliott debuts amid challenging times, Stifel says

Investing.com– Nike’s recently-named CEO, insider Eliott Hill, has taken the reins amid increased near-term challenges for the apparel maker, Stifel analysts said in a note, while flagging risks to Nike’s quarterly earnings.

Hill- who had joined Nike (NYSE:NKE) in 1988 as an intern- took over as CEO in early October, replacing John Donahoe. The leadership change came as the sportswear giant withdrew its annual revenue forecast and warned of a 8% to 10% drop in its November quarter revenue. 

Stifel analysts said they welcomed a Nike insider leading the company, but warned that the company remained in “reset mode” and that it will take time to revitalize company culture and spur brand momentum.

“For the stock, we struggle to support an upside case from current share levels absent marketplace evidence of improved visibility to revenue stabilization/inflection,” Stiefel analysts said in a note. 

The brokerage flagged risks that Nike may miss estimates when it reports its November quarter earnings next week, amid less facilitative foreign exchange conditions, as well as sluggish sales in top market China. 

Stifel expects 2025 to be a transition year for Nike, amid increased promotional activities by the company to combat high competition and laggard sales. 

The brokerage rates Nike at Hold with a target price of $79.0- just above the stock’s Wednesday close of $78.85.