Nike lands an ‘unconventional upgrade’ from Wall Street. Why we’re still believers too
Nike is still worth a spot in the Club’s portfolio, even though the stock hasn’t done a whole lot of winning lately. “It’s a fraction of what it used to be worth, but it’s still a great company,” Jim Cramer said during Wednesday’s Morning Meeting . “So I think that it’s one that you have to hold onto.” Jim admitted that Nike’s stock performance has been “disappointing,” echoing the frustration he expressed during the February Monthly Meeting. Shares are down 5% over the past five sessions and more than 12% year to date. Ending Wednesday’s session below $56 a share, Nike is trading at its lowest levels since we initiated a position in September around $68. The last time Nike closed south of $56, the market was in the throes of tariff-induced chaos in April 2025. However, analysts at Barclays offered a glimmer of hope Wednesday, upgrading the stock to a buy-equivalent rating from neutral. Analysts acknowledged it is an “unconventional upgrade into peak skepticism,” because Wall Street’s expectations for the coming years may still be too high. Nevertheless, “the risk to reward profile has shifted favorably, making Nike an attractive investment opportunity at this stage,” the analysts wrote. Believing the worst may be behind the sportswear giant, Barclays raised its price target on the stock to $73 a share from $64. The analysts said they’re encouraged that Nike has already improved its performance and cleaned up its inventory in North America under CEO Elliott Hill — necessary steps to reinvigorate its iconic brand. North America, its largest market by revenue, has been Hill’s top priority since taking the job in October 2024. Analysts noted that Nike’s running business, in particular, has been delivering impressive growth under Hill. NKE 1Y mountain Nike’s 12-month stock performance. To be sure, Barclays acknowledged Nike’s turnaround still faces risks around tariffs, competition and a potential weakening in consumer spending tied to the Middle East conflict. “I think people are becoming very skeptical,” Jim said. Like Barclays, he pointed to rising competition from brands such as Hoka, On, New Balance and Adidas . China, once a major growth engine for Nike, has also become a major problem. When Nike reported quarterly results in mid-December , declining sales in China were a big reason why the stock fell 10.5% the day after earnings. “China’s not working, [the] direct-to-consumer [strategy is] not working,” Jim said. Nike’s struggles in China were a motivating factor behind Wells Fargo’s decision to remove Nike from its list of “top picks” last week. Analysts also lowered their fiscal 2027 earnings per share estimates because of weakness in the region. Despite those adjustments, Wells Fargo reiterated its buy-equivalent rating on the stock. We’re clearly not the only ones who see value in Nike’s stock. Late last year, a round of Nike insiders — including board member and Apple CEO Tim Cook — made a splash by purchasing stock in the open market. On the heels of Nike’s post-earnings stock drop, that was a welcome vote of confidence in its comeback. Investors will get their latest progress report on the evening of March 31, when Nike is slated to release its next set of quarterly numbers. “I’m still a believer that they can get this thing right,” Jim said. (Jim Cramer’s Charitable Trust is long NKE . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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