NIKE Shares Plunge Following Analyst Downgrade to $73 Target

Shares of NIKE, Inc. (NYSE:NKE) experienced a significant decline in pre-market trading on Friday, gapping down after Bank of America lowered its price target from $84.00 to $73.00. The stock, which closed at $65.63 on the previous day, opened at $59.20, marking a notable drop that has raised attention among investors and analysts alike.

As of the latest trading session, NIKE shares were priced at $59.48, with a trading volume of 19,209,855 shares. Despite this setback, Bank of America maintains a buy rating on the stock, suggesting some level of confidence in its long-term potential.

Analyst Ratings Provide Mixed Signals

NIKE’s recent performance has caught the eye of various research firms. Raymond James Financial reaffirmed a “market perform” rating earlier in the week, while Oppenheimer reiterated an “outperform” rating. Adding to the mixed signals, TD Cowen upgraded its position on NIKE from “hold” to “buy,” raising the target price from $62.00 to $85.00. Conversely, Zacks Research upgraded the stock from a “strong sell” to a “hold” on August 26.

Overall, three analysts classify NIKE as a Strong Buy, with twenty-five giving it a Buy rating, and ten recommending a Hold. According to MarketBeat, the company currently holds an average rating of “Moderate Buy” alongside a consensus price target of $77.90.

Institutional Holdings Show Increased Interest

Recent changes in institutional holdings indicate a growing interest in NIKE. Mascoma Wealth Management LLC has acquired a new position valued at approximately $26,000. Notably, Halbert Hargrove Global Advisors LLC increased its stake by an impressive 952.6%, now owning 400 shares worth around $28,000. Other firms, including Saudi Central Bank and Matrix Trust Co, have also made notable investments, with the latter boosting its holdings by 53.1%.

Currently, approximately 64.25% of NIKE’s stock is held by hedge funds and institutional investors, reflecting a robust institutional interest in the company’s future.

NIKE’s stock has declined by 8.7% recently. Financially, the company boasts a quick ratio of 1.45, a current ratio of 2.19, and a debt-to-equity ratio of 0.59. NIKE’s market capitalization stands at $88.60 billion, with a price-to-earnings ratio of 30.79 and a beta of 1.29.

Recent Earnings and Dividend Announcement

On December 18, NIKE released its quarterly earnings, revealing a profit of $0.53 per share, surpassing analysts’ expectations of $0.37 by $0.16. The company reported quarterly revenue of $12.43 billion, exceeding the anticipated $12.19 billion. This performance translates to a return on equity of 21.16% and a net margin of 6.23%, with a year-over-year revenue growth of 0.6%.

Furthermore, NIKE announced a quarterly dividend of $0.41, set to be paid on January 2, 2024, to shareholders of record as of December 1. This increase from the previous dividend of $0.40 translates to an annualized dividend of $1.64, yielding approximately 2.7%. The company’s payout ratio currently sits at 84.10%.

NIKE, Inc. designs, develops, markets, and sells athletic footwear, apparel, and accessories worldwide, operating under several trademarks including Jumpman and Converse. The recent stock movements and analyst ratings reflect ongoing interest and scrutiny in the performance of this global brand.