By George Glover
Weaker profit and lackluster sales in China dragged down Nike stock last year. But one bull believes that now is the perfect time for investors to buy the dip.
The sportswear retailer is Jefferies' number one large-cap stock pick for 2026. Analyst Randal Konik said he "would buy shares aggressively" ahead of this week's ICR Conference, which focuses on consumer trends, in a note on Sunday.
He rates Nike as a Buy with a $110 price target that implies upside of 67% to Friday's closing price.
Konik noted that Nike is on the verge of becoming a dividend aristocrat, referring to companies referring to companies that have increased payouts to investors every year for at least the last 25 years. Nike has raised its dividend every year since 2002, according to FactSet data.
Hitting that milestone at the end of 2026 would "put Nike on even more investor screens," Konik said. He added that the stock looks cheap, trading at a price-to-sales ratio of just 2.1-times, which is near a 15-year low.
The analyst expects sales in Europe, the Middle East and Africa to improve and revenue for China to hit a floor this year thanks to new CEO Elliott Hill's turnaround plan, which is focused on fixing "one geography and one category at a time." Hill said on an earnings call last month that the company was in the "middle innings" of its comeback, while cautioning investors that progress wouldn't be linear.
Nike shares slumped 16% last year, lagging the benchmark S&P 500's 16% gain.
One of the lowlights for investors came when the stock slumped 11% in a day after Nike beat on earnings and revenue for its fiscal second quarter. Investors instead zeroed in on declining profit, softer sales in Greater China, and a 30% slump in revenue for the Converse footwear brand.
Konik said that the results showed that Hill's "turnaround is gaining traction."
His advice for investors at the time? "Just BUY it."
Write to George Glover at george.glover@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 12, 2026 05:30 ET (10:30 GMT)
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