NIKE (NYSE:NKE), a global athletic footwear and apparel brand, closed at $35.75, down 0.67%. Bank of America downgraded NIKE and cut its price target on the stock from $47 to $30. Investors are waiting for the Oct. 1 earnings report and for any potential guidance. Trading volume reached 34.2M shares, coming in nearly 23% above its three-month average of 27.8M shares.
How the markets moved today
The S&P 500 (SNPINDEX:^GSPC) rose 0.49% to 7,742, and the Nasdaq Composite (NASDAQINDEX:^IXIC) rose 0.48% to 27,069. Among athletic footwear, apparel, equipment, and accessories peers, lululemon athletica (NASDAQ:LULU) closed at $101.30, down 0.33%, while Under Armour (NYSE:UAA) closed at $4.42, down 1.67%, showing mixed pressure across the category.
What this means for investors
An analyst with Bank of America lowered their price target on Nike stock from $47 to $30 on Friday, but the apparel juggernaut’s shares largely remained flat. Over the last five years, however, NKE stock has lost three-quarters of its value.
The analyst lowered their EPS estimates for Nike to $1.43 in 2027 and $1.87 in 2028, as they see the company’s slow-but-steady turnaround taking even longer than already expected.
One alarming aspect of this EPS guidance is that, if it comes to fruition, Nike’s $1.64-per-share dividend could be at risk, as it would be paying out more to shareholders than it would generate in net income.
While Nike has made multiple mistakes over the last five years or so, I cannot help but think the brand still has some salvageable value at some point. That said, I’m not interested in rushing in to buy the stock until there is some stabilization or a sales turnaround.
Should you buy stock in Nike right now?
Before you buy stock in Nike, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nike wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $386,781!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,379,943!*
Now, it’s worth noting Stock Advisor’s total average return is 936% — a market-crushing outperformance compared to 213% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.