Tariffs have rattled retail stocks all year, pushing companies like Nike (NKE) to shift manufacturing out of China and rethink global sales strategies. Vietnam quickly became a top manufacturing alternative, until new tariff threats put that plan in jeopardy earlier this year.
Now, a fresh trade deal between the U.S. and Vietnam has eased some of those concerns. The agreement sets tariffs at 20%, far lower than the 46% rate floated in April. That news sent retail stocks climbing. Nike shares rose 4% on July 2, while Under Armour (UA), Levi Strauss (LEVI), and others followed with smaller gains.
But the real story with Nike isn’t just this short-term pop. The company is deep into a multi-year turnaround, trying to rebuild its brand strength, tighten supply chains, and boost digital sales. With some trade trade clarity now supporting shares, investors may want to take a closer look at NKE stock.
About Nike Stock
Nike is a global leader in the design, development, marketing, and sale of athletic footwear, apparel, equipment, and other accessories. The company operates under several trademarks, including NIKE, Jumpman, Converse, and Chuck Taylor. Nike sells its products through NIKE Direct operations, comprising both retail stores and digital platforms, as well as through wholesale accounts worldwide. The company currently boasts a market cap of $109 billion.
After hitting a 52-week low of $53.28 in April 2025, Nike stock has rebounded sharply, rising nearly 19% in the past month. The recovery has been driven by strong Q4 earnings, a favorable U.S.–Vietnam trade deal, and Nike’s strategic efforts in cost management and supply chain optimization.
In terms of valuation, NKE trades at a forward price-earnings ratio of 45.3x which is substantially higher than the sector median of 17x, suggesting that the stock may be overvalued relative to its peers. Additionally, its price-sales ratio of 2.4 is significantly above the sector median of 0.9x, indicating that investors are paying a high premium for future growth.
One positive is that Nike pays a healthy dividend to its investors. It currently yields 2.2%, with an annual payout of $1.60 per share and a payout ratio of 65.6%.
Nike Gets Some Relief in Vietnam Trade Deal
Nike sources roughly half of its footwear from Vietnam, so the U.S.–Vietnam trade agreement reached earlier in July is highly relevant. President Donald Trump announced a new deal imposing a 20% tariff on many Vietnamese imports. Importantly, the 20% rate is well below earlier proposals. It replaces an initially threatened 46% tariff and is lower than market fears of 25%-30%. This degree of clarity helped calm investors: Nike’s stock jumped amid relief at the avoided worst-case scenario. Analysts noted the announcement “goes some way to end uncertainty, and could encourage some retailers to go ahead and place orders.”
Nike’s ‘Win Now’ Plan Brings Short-Term Pain, Long-Term Promise
Nike is currently in the middle of a multi-year turnaround strategy aimed at revitalizing its product pipeline, streamlining its supply chain, and resetting its brand appeal through more performance-oriented offerings. Dubbed the “Win Now” initiative, the effort involves short-term pain: slashing excess inventory, reducing reliance on legacy franchises, and ramping up marketing spend to re-engage core customers. The plan is aggressive, and Q4 results confirmed the expected financial drag as Nike accelerated the reset.
Nike reported revenue of $46.3 billion, down 10% year-over-year. The fourth quarter saw an even steeper 12% decline in sales, bringing in $11.1 billion. These declines reflected a combination of lower wholesale demand, softer Chinese sales, and deliberate efforts to phase out lower-margin or outdated styles. Gross margins contracted sharply, dropping 440 basis points to 40.3% in Q4, as promotional activity remained high and the product mix tilted toward discounted inventory.
Full-year earnings per share dropped 42% to $2.16, while Q4 EPS reached $0.14, down 86% yet above the estimate. However, the company kept inventory flat year-over-year at $7.5 billion, a signal that its inventory-clearing efforts are gaining traction.
What Do Analysts Think about Nike Stock?
Wall Street analysts have issued a consensus rating of “Moderate Buy” for Nike. Among 35 analysts covering the stock, 14 rate it a “Strong Buy,” three suggest a “Moderate Buy,” 16 recommend holding, while two assign a “Strong Sell.”
Nike shares are currently trading just shy of the average price target of $75.87. The Street-high target of $120 implies the stock could surge as much as 64% from current levels.
