Is It Time for NIKE and Target to Shine Again?

A few popular socks, NIKE NKE and Target TGT have faced notable pressure over recent years, underperforming in a big way and regularly posting weaker-than-expected results.Both companies have faced issues concerning inventory, with Target’s more-discretionary merchandise facing big pressure post-COVID. Target saw a huge wave of growth during the lockdown period when consumers were spending heavily on the category, but that has since disappeared.NIKE has faced similar issues, with the stock’s tariff exposure not helping sentiment either in 2025. The company has largely been unable to capture consumers’ wants, helping further explain NKE’s recent struggles.But with both stocks showing life over the past month, as shown below, it raises a valid question – is it time for these beaten-down stocks to finally shine again?Image Source: Zacks Investment ResearchNike Shares Bounce Weak quarterly results, stemming from soft demand for its products, have been a major thorn in NKE’s side for multiple periods now, regularly dragging down sentiment. The tariff situation also remains cloudy, another negative force impacting performance.Positive commentary surrounding upcoming periods was enough for the stock to enjoy a nice pop post-earnings following its latest release, but results were primarily soft. Sales of $11.1 billion throughout the period fell 12% YoY, whereas its gross margin contracted to 40.3% vs. 44.7% in the same period last year.Below is a chart illustrating the company’s margins on a quarterly basis. Please note that the values are calculated on a trailing twelve-month basis.Image Source: Zacks Investment ResearchCFO Matthew Friend stated –"The fourth quarter reflected the largest financial impact from our Win Now actions, and we expect the headwinds to moderate from here. I am confident in our ability to navigate through this current dynamic and uncertain environment by focusing on what we can control and executing our Win Now actions."Moderating headwinds in the coming periods help explain the surge post-earnings, essentially letting us know that the worst could be over. The company’s EPS outlook remains negative across the board, with further downward revisions hitting the tape following the release.Image Source: Zacks Investment ResearchWhile the recent commentary surrounding upcoming periods is undoubtedly a positive for the stock, the near-term EPS outlook remains bearish, with investors likely better off waiting until positive revisions begin rolling in.Target Makes Leadership ChangesQuarterly results from Target have regularly disappointed over recent years, with the company’s more ‘discretionary’ inventory being a major thorn in the side in the post-COVID era. Comparable store sales decreased 3.8% YoY throughout its latest period, continuing the recent trend.While its retail stores may not be seeing growth, its digital efforts certainly can’t get overlooked. Digital comparable sales grew 4.7% YoY in its latest period paired with a 36% increase in same-day delivery through Target Circle 360.Below is a chart illustrating the company’s sales on a quarterly basis.Image Source: Zacks Investment ResearchIt’s critical to note that TGT announced the establishment of a multi-year acceleration office in the release along with several leadership changes, with the effort aimed at enabling faster decisions and execution of its core strategic initiatives in support of a return to growth.Analysts have remained bearish in their EPS outlooks, however, with downward revisions present across the board.Image Source: Zacks Investment ResearchBottom LineBoth stocks above – NIKE NKE and Target TGT – have faced big pressure over recent years, well off all-time highs. Weak quarterly results, stemming from less-than-ideal product assortments for their consumers, have been a major driving force behind their struggles.While the recent positivity in shares is certainly notable following the multi-year long plunges, the reality remains that both companies face a challenging environment, reflected by analysts’ downward EPS revisions. Positive EPS revisions are key to signal a bullish turnaround.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NIKE, Inc. (NKE): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks