Nike gets its groove back
Nike is in the spotlight again, and finally, the buzz is good. Market sage Jim Cramer, the loud and colorful voice of CNBC’s “Squawk on the Street”, recommends buying Nike again.
“I haven’t liked the stock for a while, but now I’m making a bull call,” Cramer announced with confidence. In simple words, he thinks Nike’s rough patch may finally be ending—and brighter days are ahead.
What went wrong for Nike?
Over the last few years, Nike hasn’t exactly been sprinting ahead. Instead, the company stumbled because of several problems:
- Too much competition from brands like Adidas and Lululemon.
- Too much inventory is piling up since the pandemic supply chain fiasco.
- Direct-to-consumer play misses a step, as Nike tried to sell more directly and less in third-party stores—but it didn’t exactly go smoothly.
This left investors doubting the brand that once seemed invincible.
A fresh shot of energy
So what’s changing now? Cramer attributes it to better inventory management and Nike’s re-strengthened relationships with big-name retailers.
Nike once more is in close partnership with retailers like Foot Locker and Dick’s Sporting Goods. In fact, Dick’s just bought a profitable sneaker chain to help fuel its Nike sneaker sales. The move could help Nike place its products in more hands and regain its wholesale muscle.
Cramer views this as a turning point and states, “You have to anticipate the bottom.” Translation? The worst may already be behind Nike.
Analysts agree: Nike looks stronger
It’s not just Cramer who’s excited. Wall Street is beginning to fall for Nike all over again.
On Wednesday, TD Cowen analysts upgraded Nike to “buy” from “hold”. They also increased their price target to $85 a share from $62 a share. That’s a big pickup, showing real confidence in Nike’s turnaround.
They also praised:
- Improved profit margins (Nike is making more profit per item).
- Improved trends in the legendary Jordan brand.
- New leadership with CEO Elliott Hill, who started in October.
Hill, as Cramer portrays him, “gets the tradition” and is “reincarnating the magic.” That’s high praise for a man tasked with restoring Nike to order.
Why Nike still matters
Nike isn’t a brand—it’s a cultural phenomenon. From the swoosh to the “Just Do It” mantra, Nike has had a presence on the sports and fashion landscape for decades. When Nike stumbles, the world stumbles along with it. When Nike returns, the fever spreads rapidly.
Cramer even went as far as to suggest that he would consider adding Nike to his Charitable Trust portfolio, the exclusive portfolio held by CNBC’s Investing Club. That is yet another unequivocal vote of confidence.
What this means for investors
For anyone who tracks the stock market, the word is out: Nike is very much in play. Sure, it still faces tough competition, but signs of recovery are strong. Nike has improved its inventory, strengthened its retail relationships, and its leadership believes these factors can propel the company into a new growth phase.
Approximately half of Wall Street analysts currently consider Nike a “buy”. That is short of the close to 70% who were of the same opinion three years ago, but the trend is in the proper direction.
The Bottom Line
Nike has weathered the past couple of years, but shrill voices on Wall Street think the tide is turning. Jim Cramer, TD Cowen, and a growing number of analysts concur that Nike is set to run again.
With fresh leadership, smarter inventory moves, and strong retailer partnerships, Nike could once more be the stock to watch. For fans of the brand—and for investors looking for a comeback story—Nike’s rally might just be getting started.
So, if you’ve been waiting on the sidelines, it may be time to lace up those investment sneakers. Nike could be ready to “Just Do It” all over again.
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