With a YTD loss of more than 20%, Nike (NKE) is among the worst-performing constituents of the S&P 500 Index ($SPX) and Dow Jones Industrial Average Index ($DOWI). The stock closed in the red for three consecutive years and trades at just over one-third of its all-time high that it hit in November 2021. However, the stock rose over 2% yesterday after it announced a price hike and a partnership with Amazon (AMZN). 

Is NKE stock a buy in light of these developments? We’ll discuss this in this article.

Nike Raises Prices and Starts Selling on Amazon

Nike’s price hike in the U.S., its biggest market, comes amid President Donald Trump’s 10% base tariffs on imports. The hike should help Nike offset the tariffs at a time when it is already grappling with compression of its gross margins. Investors should note that Nike did not attribute the hike to tariffs and in a statement said, "We regularly evaluate our business and make pricing adjustments as part of our seasonal planning.”

In another crucial development, Nike said it would start selling its products on Amazon. The company stopped selling its products on Amazon in 2019 to stop the proliferation of fake goods on the e-commerce giant’s platform. The move was also part of Nike’s pivot to direct sales through its own stores and online portal. 

However, a lot has changed since then. Amazon has clamped down on counterfeit goods on its platform. And importantly, Nike has also changed track and is now doubling down on third-party sellers. Under CEO Elliott Hill, Nike has been looking to mend relationships with third-party sellers after prioritizing its direct channels over wholesale sales under his predecessor, John Donahoe.

Nike’s decision to sell its products on Amazon looks like the logical step in its strategic pivot toward wholesale sales and will help it connect with millions of shoppers and better compete with rival brands.

NKE Stock Forecast: Analysts Welcome Decision to Sell on Amazon

Several Wall Street analysts welcomed Nike’s decision to sell its products on Amazon, with Truist saying, “We’re bullish on the opportunity.” Jefferies also reiterated its “Buy” rating on Nike, and said, “This move expands Nike’s reach and reinforces its dominance as the #1 athletic footwear brand.”

Jefferies praised Hill for “making all the right moves.” Referring to Nike’s depressed valuations, the firm said that it sees “meaningful upside over the next 12-24 months.” Nike’s mean target price is $74.54, which is 21.6% higher than the May 22 closing price, while the Street-high target price of $120 implies the stock almost doubling from these levels.

Should You Buy Nike Stock?

Nike trades at a forward price-earnings (P/E) multiple of 29x, which might appear elevated given where broader market valuations stand. Also, Nike’s business has been marred by falling sales and profitability. The company reported a year-over-year fall in revenues in the three quarters of this fiscal year and forecast a decline in the current quarter also.

Consensus estimates call for Nike’s revenues to fall in the next fiscal year (ending May 2026) as well. The company’s per-share earnings are also expected to fall by almost 10% in the next fiscal year. Nike is expected to return to top-line and bottom-line growth by fiscal 2027, and even then, its net profits are projected to be considerably lower than the peak in fiscal year 2022.

While Nike is taking many steps in its turnaround, the company might not be able to reach its all-time high profitability anytime soon. However, with a market cap below $90 billion and a dividend yield above 2.6%, it is not the time to sell Nike stock. Investors need to be patient with its turnaround, which will start showing results only in the medium to long term. The Amazon partnership and price hikes are steps in the right direction and will help Nike grow its revenue and earnings.