RBC Capital stated that margin and earnings pressure are primarily driven by higher-than-expected selling, general, and administrative expenses, as well as the incremental U.S. tariff impact forecast for the second quarter and fiscal 2026.

Pedestrians walk past a large Nike flagship store on a rainy day. (Photo by Cheng Xin/Getty Images)

Ananya Mariam Rajesh·Stocktwits

Published Oct 10, 2025 | 9:34 AM GMT-04

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Nike (NKE) stock drew investor attention on Friday after RBC reduced its price target to $85 from $90, as the firm expects the sportswear giant to post lower gross margin and earnings.

RBC Capital maintained an ‘Outperform’ rating, according to TheFly. The firm said it was updating its estimates following the company's first-quarter results, anticipating broadly stable revenues but lower gross margin and earnings. It noted that margin and earnings pressure are largely rising from higher-than-expected selling, general, and administrative expenses, as well as the incremental U.S. tariff impact forecast for the second quarter and fiscal 2026.

“We expect second-quarter gross margins to be down approximately 300 to 375 basis points, including a net headwind of 175 basis points from the new incremental tariffs,” Chief Financial Officer Matthew Friend said during a post-earnings call last week.

Retail sentiment on Nike dipped to ‘bearish’ from ‘neutral’ territory compared to a day ago, with message volumes at ‘low’ levels, according to data from Stocktwits.

NKE sentiment and message volume October 10, 2025, as of 9 am ET | Source: Stocktwits

Shares of Nike were marginally up in early trading on Thursday. The retail user message count on the stock jumped nearly 20% in the last 24 hours on Stocktwits.

RBC Capital said that it is encouraged by the contained progress being made and remains positive on the 2026 setup, but would also prefer to see more parts of the Nike product offer refreshed.

On Monday, Nike CEO Elliott Hill told CNBC that a turnaround at the company will “take a while.”

“It’s gonna take a while. It’s not linear. But it is a portfolio, and ultimately the goal is to have the entire portfolio all working together to drive the revenue and the profit that we hope to deliver for all of our investors,” Hill said.

A bullish user on Stocktwits noted that the stock could go back to $75 in a week or two.

Shares of Nike have declined 10% this year and lost over 17% of their value in the last 12 months.

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