NIKE's (NKE) revenue recovery is expected to accelerate by fiscal Q3, aided by the 2026 FIFA World Cup, which should narrow its performance gap with peers and potentially trigger stronger-than-expected results with limited risk, RBC Capital Markets said in a report Thursday.

The World Cup could generate an additional $1.3 billion in revenue for Nike, which sponsors six of the top 10 FIFA-ranked international teams, RBC analysts said. The company's $4.9 billion marketing budget for fiscal year 2026, which is nearly double that of its closest competitor, is expected to give it a major advantage, they added.

RBC forecasts that Nike will achieve a 5% to 6% revenue growth, a 45% gross margin, and a 13% earnings before interest and taxes margin by fiscal year 2029, with earnings per share exceeding $4.

Channel checks and surveys also suggested resilience in the US and improving momentum in China, even as the company transitions through inventory clean-up, RBC said.

RBC upgraded Nike's stock to outperform from sector perform and raised its price target to $90 from $76, citing gains in running footwear and a streamlined organizational structure expected to drive faster decision-making and growth.

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