Here’s why North America recovery isn’t enough for Nike stock to rally in 2026

Nike Inc (NYSE: NKE) may have received a symbolic vote of confidence this week with Apple’s (NASDAQ: AAPL) chief executive Tim Cook buying roughly $3.0 million worth of its stock.But a senior Guggenheim analyst – Simeon Siegel – warns the firm’s turnaround story remains far from complete.While the North America business sure has improved, three key overhangs suggest investors must tread with caution on Nike stock heading into 2026, he told CNBC in an interview last week.At the time of writing, NKE shares are down nearly 25% versus their July high.China weakness continues to weigh on Nike stockNike stock’s biggest unresolved challenge lies in Greater China, where sales continue to disappoint. As Siegel put it: “North America is good … but China remains a little bit more challenged.”This regional imbalance is significant because Beijing has historically been a major growth engine for Nike – and so, continued weakness there undermines its broader narrative of recovery.NKE’s recently posted earnings, while better than expected, revealed a continued decline in China sales, dragging the overall sentiment.Meanwhile, tariffs have compounded the problem, adding a $1.5 billion headwind.According to the Guggenheim analyst, until Nike Inc stabilises its China operations, investors will struggle to see the company’s turnaround as being successful – regardless of resilience elsewhere.Earnings revisions remain a risk for NKE sharesOn “The Exchange”, Siegel cautioned investors against assuming that Nike Inc is past the wave of downward earnings revisions.The uncertainty around whether “numbers are safe and everything is good” reflects a broader issue: NKE has repeatedly adjusted guidance – leaving investors wary of further cuts.Even symbolic gestures – such as Tim Cook’s recent purchase of Nike shares – can’t erase doubts about the durability of earnings.The focus remains on margin pressures, turnaround costs, and discounting, Siegel noted – adding that until NKE demonstrates consistent earnings stability, the risk of further revisions will continue to weigh on its stock.Sentiment vs fundamentals mismatchFinally, Simeon Siegel highlighted the disconnect between consumer sentiment and fundamentals.Holiday traffic looks strong, and he observed busy malls, but the analyst warned that retail stocks often underperform around year‑end due to volatility, thin trading volumes, and anecdotal biases. “At the end of the day, these are companies. They have numbers. They have fundamentals,” he said, stressing that investor enthusiasm must be grounded in financial reality.Consumer surveys show frustration with housing and insurance costs, yet retail spending remains resilient.This mismatch creates noise around NKE stock, where optimism about brand strength collides with lingering operational challenges. Until fundamentals catch up, sentiment alone won’t fix Nike’s story. Siegel concluded.Other Wall Street analysts, however, remain bullish on the footwear giant, with a mean target of $77 indicating potential upside of nearly 30% from here.The post Here's why North America recovery isn't enough for Nike stock to rally in 2026 appeared first on Invezz