Nike Upgraded to Overweight as Strategic Marketplace Cleanup Signals Recovery Potential

Piper Sandler analysts upgraded Nike (NYSE:NKE) from Neutral to Overweight, raising the price target on the stock to $90 from $72. The upgrade reflects growing confidence in Nike's recovery trajectory as the company takes decisive steps to address inventory challenges and reposition for future growth.

Under the leadership of CEO Elliott Hill, Nike has accelerated efforts to clean up its marketplace by reclaiming products and offering markdown support to retail partners. These measures aim to streamline inventory and restore a pull-market dynamic, which could lead to a visible turnaround entering fiscal 2026. Despite lingering negativity in buy-side sentiment—evidenced by a significant increase in short interest since September—this proactive approach positions Nike for long-term success, according to the analysts.

The timeline for transitioning back to a pull-market environment, driven by renewed product innovation, remains a central debate among investors. Piper Sandler’s analysis outlines a bottom-up sales scenario in which Nike halves its penetration of classic franchise products and achieves an 80/20 full-price-to-off-price sales mix. This shift could realistically materialize within three quarters, accelerating the company’s path to recovery.