Wells Fargo names Nike as a Top Pick, raises price target to $125

Wells Fargo raised the firm’s price target on Nike (NKE) to $125 from $120 and keeps an Overweight rating on the shares ahead of quarterly results. The firm expects a Q2 beat and a greater emphasis on improving profitability as drivers to the rally. While Wells still views full year revenue guidance as “risky,” it simply believes margins greater than revenue today. The firm has also removed Lululemon (LULU) and replaced it with Nike as one of its Top Picks, which it also named its new Top Defensive Pick. Wells believes the recovery characteristics and self-help story now beginning at Nike make for a more compelling long idea into 2024.