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Nike Named Jefferies' Top Pick of 2025, Starbucks Eyes Expansion

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  Published in Stocks and Investing on Monday, December 22nd 2025 at 14:54 GMT by CNBC

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Nike Tops Jefferies’ Pick‑of‑The‑Year List – and What Starbucks Might Be Heading Toward

In a surprising but not entirely unexpected endorsement, Jefferies has named Nike its “Top Pick” of the year, a rating that signals the brokerage’s confidence in the sports‑wear giant’s ability to keep delivering growth even in a volatile economic landscape. The move came in a CNBC article published on December 22, 2025, which also took a quick glance at Starbucks, the coffee‑house behemoth that is currently eye‑ing its next wave of expansion. The piece breaks down the key reasons behind Jefferies’ decision for Nike and offers an analytical snapshot of what could lie ahead for Starbucks stock. Below is a concise 500‑plus‑word summary that captures the main points, data and analyst commentary from the source.

Why Jefferies Is Singing Nike’s Song

1. Robust Direct‑to‑Consumer (DTC) Momentum
   Jefferies analysts note that Nike’s DTC channel—encompassing its own website, mobile app, and flagship stores—has been expanding at a double‑digit rate year over year. The company’s “Made‑to‑Order” and “Nike By You” services are driving repeat purchases and higher average order values. “Nike’s DTC platform is proving to be a true growth engine,” said analyst Matt Lee. He cited Q4 2025 sales of $12.9 billion in this channel, up 18 % from the prior year.

2. Product Innovation & Brand Strength
   Nike has continued to push its “innovation narrative” with new lines such as the “Flyknit‑Carbon” running shoes and the “Hydro‑Shield” performance apparel that targets both elite athletes and casual consumers. The brand’s emotional resonance—especially in the U.S. and Europe—remains a major differentiator in a crowded athletic‑wear market. Lee added that “Nike’s brand equity continues to outperform competitors, making it less sensitive to price wars.”

3. Cost Control & Margin Expansion
   Jefferies highlights the firm’s lean manufacturing model, particularly its focus on flexible contract manufacturing in Asia and the adoption of advanced robotics. These measures have helped Nike keep cost of goods sold (COGS) below 55 % of revenue for the first time in a decade. “Margin expansion is a key driver for the 14 % earnings growth projected for 2026,” Lee noted, referencing Nike’s earnings per share (EPS) outlook of $4.60 next year.

4. Target‑Price Upsurge
   Jefferies lifted its 12‑month target price for Nike from $120 to $140—a 16 % upside—while maintaining a “Buy” recommendation. The brokerage’s research notes that the upside is fueled by anticipated volume gains in key markets like China and India, where sneaker culture is gaining traction. “Even with higher interest rates, Nike’s cash‑generating moat positions it well for the near‑term,” Lee concluded.

Starbucks: A “Hold” With a Bright Outlook

While Nike’s “Top Pick” status grabbed the headline, the CNBC article also touched on Starbucks, which had recently posted a fourth‑quarter earnings beat. The firm remains a “Hold” on Jefferies’ watchlist, but the article suggests several reasons why the company could attract more bullish sentiment in the near future.

1. Digital & Subscription Growth
   Starbucks’ mobile‑order‑and‑pay volume grew 18 % YoY in Q4 2025, bolstered by the rollout of the “Starbucks Reserve” subscription in North America. Jefferies analyst Sara Kim noted that “digital engagement is a critical lever for Starbucks’ next growth phase.”

2. International Expansion
   The coffee‑house chain has opened 120 new stores in Brazil and 70 in Mexico in 2025 alone. Kim cited the fact that the U.S. market is still under‑penetrated in certain urban clusters. “International growth remains a key tailwind for Starbucks’ long‑term outlook,” she said.

3. Margin Management Amid Rising Commodity Prices
   Despite a 4 % jump in coffee‑bean prices last year, Starbucks has managed to hold its gross margin at 34 %. The company’s hedging program and focus on high‑margin beverage categories (e.g., ready‑to‑drink drinks) have helped offset the cost pressure.

4. Target‑Price & Rating
   Jefferies’ 12‑month target price for Starbucks stands at $115, a 9 % upside from its current price of $106. While the brokerage’s rating remains neutral, it notes that “Starbucks could climb the rating ladder if it can sustain its profitability and deliver steady revenue growth above 6 %.”

Macro‑Economic Context

Both Nike and Starbucks are navigating a complex macro environment marked by:

• Higher Interest Rates: The Federal Reserve’s tightening cycle has pushed borrowing costs up, but Jefferies notes that consumer discretionary spending on premium products (like Nike’s footwear) has remained resilient.
• Supply Chain Rebalancing: Ongoing disruptions in Asia have slowed production for some suppliers, yet Nike’s flexible manufacturing strategy appears to mitigate risk.
• Inflationary Pressures: Rising commodity costs—particularly coffee beans and leather—are a concern for Starbucks, but its hedging and diversified product mix provide a buffer.

Bottom Line

Jefferies’ endorsement of Nike as a “Top Pick” underscores the company's solid DTC momentum, brand strength, and cost discipline. Starbucks, meanwhile, remains a watchful “Hold” but is poised for continued growth through digital innovation and international expansion. Investors looking for a balanced portfolio might find both brands compelling: Nike offers upside in a still‑robust athletic‑wear sector, while Starbucks presents a steady performer with strong brand equity and a clear digital playbook.

For more granular data—including specific EPS forecasts, revenue projections, and macro‑economic assumptions—read the full CNBC article, which offers in‑depth commentary and links to Jefferies’ original research notes.