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Nike shares have underperformed in recent years, but the stock got an upgrade on Thursday. Bank of America believes expectations are finally reasonable, and predicts Nike is on its way toward turning things around.
Nike Inc (NYSE:NKE, ETR:NKE) climbed on Thursday after Bank of America granted the sportswear retailer with an upgrade, arguing “estimates finally look achievable”. Analysts bumped Nike up from a ‘neutral' to a ‘buy' rating, adding the company was “taking bold steps to transform” and that it sat at a ten-year trough in terms of price to earnings.
Lorraine Hutchinson, retail analyst at BofA Securities, joins 'Money Movers' to discuss why Nike's earnings estimates look achievable, how Nike lost the innovation edge, and more.
BofA Securities upgraded Nike Inc (NYSE:NKE) stock to "buy" from "neutral" this morning, hiking its price target to $113 from $110.
BofA upgraded Dow Jones giant Nike to a buy Thursday. Estimates "finally look achievable" and the Paris Olympics should provide a boon.
According to a recent survey from Piper Sandler, Nike (NKE) remains the number one brand for teenage consumers across footwear and apparel. In addition, luxury athleisure brand Lululemon (LULU), which gained popularity among younger shoppers in the past, now has seen a bit of a decline in teen interest.
Nike (NKE) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
From the stock market's bottom in March 2020, the Dow Jones Industrial Average has more than doubled in value. The 114% gain is all the more remarkable because the venerable index is price-weighted.
Nike faces headwinds from higher operating costs and reduced sales guidance, impacting its bottom-line profit. The company is investing in technology initiatives to improve efficiency and drive higher growth in the long term. While facing challenges, Nike remains a strong brand with the potential for a resurgence in strength by the end of 2024 or the beginning of 2025.
There are less than two weeks until the peak of the Q1 earnings reporting season gets underway, and it looks like it could be a good one. Several factors suggest the market rally can continue through the end of the period and perhaps until the end of the year.