Can Nike Stock Rebound After a Challenging Year?

While the broader market celebrates new milestones, with the Dow Jones surpassing 50,000 points, shares of the sportswear giant Nike have charted a different course. After a volatile period, a recent uptick has sparked questions about a potential turnaround. Market experts are now weighing whether the stock has finally found a floor following months of decline or if this recovery is merely a temporary rally.

A key source of last week's optimism stemmed from a bullish assessment by investment bank Jefferies. The firm's analysts reaffirmed their "Buy" rating and maintained a price target of $110. This projection suggests significant upside from the recent closing price of $63.92. In their view, the company's brand momentum is beginning to regain strength.

This analyst confidence, however, contrasts sharply with the equity's actual performance. Year-to-date, the stock has declined by approximately 16%. During the same period, competitors like Under Armour have posted notable gains following strong financial results. Nike's own balance sheet has been pressured by contracting gross margins, a consequence of rising product costs. Concurrently, the corporation has been compelled to substantially increase its expenditure on marketing and demand generation to stabilize sales volumes.

Should investors sell immediately? Or is it worth buying Nike?

Strategic Restructuring and External Challenges

Away from the trading floor, Nike's management is implementing strict cost-saving initiatives to navigate the difficult environment. In January, the company announced plans to eliminate 775 positions within its U.S. distribution centers, aiming to streamline its cost structure.

External factors are also contributing to uncertainty. Reports indicate that the U.S. Equal Employment Opportunity Commission (EEOC) is intensifying its examination of the company's internal diversity practices. In a separate development, Nike is investigating a potential data security incident linked to a ransomware group.

For investors, attention is now firmly fixed on the upcoming quarterly earnings report, scheduled for mid-March 2026. This financial release is anticipated to serve as the critical benchmark for determining whether the heightened marketing investments are yielding results and if Jefferies' aggressive price target is justified. The coming months will reveal if the recent positive sentiment marks the beginning of a sustained recovery or just a brief respite in a longer corrective phase.