Nike Inc (NYSE:NKE) stock fell 2.11% (As on June 25, 1:55:24 AM UTC-4, Source: Google Finance) after Oppenheimer upgraded the company to Outperform from Perform with a price target of $120, up from $110. Nike over the past several quarters has “struggled significantly amid a confluence of unfavorable external and internal hindrances,” which have weighed meaningfully upon sales growth and profit expansion

But Oppenheimer thinks shares are poised to rebound as the company refocuses on product innovation and brand building, and internal opportunities can offset still challenged macro and competitive dynamics in the near-term. Accordingly, the firm upgraded the stock to Outperform from Perform and hiked its price target by 9% to $120, a 25% upside to Thursday’s closing price.

Cost-cutting measures by the company coupled with strategic re-focusing geared towards strengthening innovation are impressive, Oppenheimer says, and although the firm is forecasting FQ4 EPS below the street consensus ($0.84 vs $0.85 Street) and turnaround challenges will likely be reflected in next week’s results, another modest guidance is largely discounted in shares, and “should position NKE for improving results, beginning in H2 2025.” Oppenheimer also reinstated Nike as a top, mega cap pick across the firm’s Consumer Growth & eCommerce coverage.

Meanwhile, revenues for NIKE, Inc. were slightly up on both a reported and currency-neutral basis at $12.4 billion. Revenues for the NIKE Brand were $11.9 billion, up 2 percent on a reported and currencyneutral basis, as currency-neutral growth in North America, Greater China and APLA was offset by declines in EMEA. Revenues for Converse were $495 million, down 19 percent on a reported basis and down 20 percent on a currency-neutral basis, primarily due to declines in North America and Europe. Gross margin increased 150 basis points to 44.8 percent, primarily driven by strategic pricing actions and lower ocean freight and logistics costs, partially offset by higher product input costs and restructuring charges. Cash and equivalents and short-term investments were $10.6 billion, down approximately $0.2 billion from last year, as cash generated by operations was more than offset by share repurchases, cash dividends, capital expenditures and bond repayment. NIKE continues to have a strong track record of investing to fuel growth and consistently increasing returns to shareholders, including 22 consecutive years of increasing dividend payouts. In the third quarter, NIKE returned approximately $1.4 billion to shareholders. The company is making the necessary adjustments to drive NIKE’s next chapter of growth.