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In a big shakeup, Nike is set to change its CEO, a move that has sparked both optimism and skepticism from Wall Street.
As current CEO John Donahoe steps down and longtime veteran Elliott Hill takes the reins, some analysts view the change as a positive development.
Deutsche Bank (DB) said in a research note it views the leadership change as a “positive” catalyst for the company’s shares, which jumped on the news late Thursday in after-hours trading.
“We believe this highly anticipated leadership change will inject a much-needed sense of urgency, focusing on product innovation, storytelling, marketing, and rebuilding wholesale partnerships — areas that suffered under previous leadership resulting in material underperformance in profitability and shareholder returns,” the bank noted.
The firm said Hill has “strong” internal and retail-partner relationships that should immediately boost morale.
Citi (C) said the much anticipated “changing of the guard” at Nike signals a return to the company’s roots.
“Of the potential candidates to replace Donahoe, we view Hill as one of the best-case scenarios to lead Nike back to its former roots and culture of success,” Citi noted.
However, other experts have expressed doubts about whether this change will address the underlying issues plaguing the iconic brand, such as declining sales, increased competition, and struggles to innovate.
“We do not believe a major directional change for the business is imminent,” Williams Trading analyst Sam Posner said in a research note. “It will be 15 to 18 months at minimum, now that a new CEO is in place, until true product and brand evolution would be realized, leaving us at spring 2026.”
Despite this cautious outlook, Posner noted a renewed sense of energy, stating that “the mojo” on Nike’s (NKE) campus and throughout the organization would be palpable. That’s partly due to Hill’s return after a four-year hiatus, which has been met with confidence from employees and senior executives, the firm said. Hill’s career with Nike spans over 30 years.
Jefferies (JEF) analyst Randal Konik echoed these sentiments. He said that news of Hill returning as CEO “has been positively received by the market, indicating confidence in his leadership abilities.”
However, Konik cautioned that Hill “faces challenges after his four-year absence, including rising competition and changes in distribution, brand building, and product.”
With rivals including Adidas, Hoka (DECK), Skechers, and Under Armour continuously innovating and capturing market share, Nike’s ability to maintain its status as a market leader is under scrutiny.
As Hill steps into his new role on October 14, the stakes are high. Investors and analysts alike are closely watching to see if this leadership change can usher in the transformative strategies that Nike needs to regain its competitive edge. While the potential for turnaround exists, the road ahead will require careful navigation.
