One analyst is no longer willing to run with Nike (NYSE: NKE), and the stock stumbled on Wednesday as a result. Numerous investors took the pundit's recommendation downgrade to heart and traded out of Nike; when the race was over, the shares had clocked a 2% decline in price. That wasn't impressive considering the S&P 500 index inched up on the day, albeit only marginally.
No longer overweight
Before market open, Wells Fargo (NYSE: WFC) prognosticator Ike Boruchow knocked his Nike recommendation down to equal weight (read: hold) from his preceding overweight (buy). He also made a relatively aggressive cut to his price target on the well-known athletic apparel and equipment company to $55 per share from $75.
Nike bulls could take some comfort from the fact that Boruchow's move was part of a broader update on U.S. apparel and footwear stocks, and not limited to Nike.
According to reports, the analyst expressed concern about the effect of the current "punitive" tariffs imposed by the Trump administration on such companies, many of which are active importers of goods and materials from China.
Boruchow also factored in widespread expectations of a mild recession in this country, which to no small degree should stem from the trade war. Finally, he opined that Nike's business turnaround, in which it's aiming to reestablish good relations with retailers following a clumsy attempt to focus on direct-to-consumer (DTC) selling, was taking longer than anticipated.
A long game
When management aims to change the strategy of a large, sprawling business, it can be like attempting to turn a battleship -- a slow and challenging endeavor. That being said, we really should be seeing more significant improvements from Nike now that its shift has been in effect for quite some time.
There's much to like about this innovative company with its great knack for marketing, but investors are getting understandably impatient for better results.
Should you invest $1,000 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 $607,048!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $668,193!*
Now, it’s worth noting Stock Advisor’s total average return is 880% — a market-crushing outperformance compared to 161% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of April 28, 2025
Wells Fargo is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.
