Are These Beaten-Down Stocks a Buy?

Several popular stocks – NIKE NKE and Target TGT – have been beaten down over recent years, widely underperforming relative to the S&P 500.

Given their falls from glory, are they a buy at cheaper levels? Let’s take a closer look at how each presently stacks up.

Nike Sees Relief

Weak quarterly results, stemming from soft demand for its products, have been a major thorn in NKE’s side, with the initial China tariff announcements early in the year causing a meltdown.

However, shares have rebounded nicely from their 2025 lows following the recent de-escalation announcement, rising 9% over the past month and outperforming the S&P 500.

The tariff situation remains cloudy, given that the de-escalation is currently in place for 90 days, but it nevertheless represents a step in the right direction concerning a potential permanent deal.  

Most apparel names got hammered on the initial tariff announcements due to their heavy manufacturing exposure, with investors recalculating their profitability outlooks in a big way.

The earnings outlook for its current fiscal year has been overall negative but has begun shifting positively, as shown below. Still, investors would likely be better off staying on the sidelines until further clarification is provided regarding the tariff issue, which will result in a much more stable EPS outlook overall.

Target Struggles

TGT shares have continued to struggle in 2025, down nearly 30% and widely underperforming not only the S&P 500 but also many other peer retailers. Quarterly results have regularly brought post-earnings pressure over recent periods, with the company’s more ‘discretionary’ inventory being a major thorn in the side over the last several years overall.

Target’s product mix is much less exposed to the grocery side relative to Walmart, for example, carrying a much less ‘staply’ nature. The company benefited massively during the pandemic era, when consumers were rapidly spending on discretionary items, but that theme has long subsided.

The less-than-ideal inventory mix has been the primary driver behind the stock’s decline over recent years. Its recent set of quarterly results also didn’t deliver shareholders the break they were looking for, with comparable store sales declining 5.7% YoY throughout its latest period.

As shown below, sales growth has remained muted.

Bottom Line

Both stocks above – NIKE NKE and Target TGT – have faced big pressure over recent years, well off all-time highs. Weak quarterly results, stemming from less-than-ideal product assortments for their consumers, have been a major driving force behind their struggles.

While both stocks have been beaten down considerably, investors would be better off waiting for further clarity concerning the tariffs issue and whether each can re-interest its consumers.  

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This article originally published on Zacks Investment Research (zacks.com).

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