10 Worst Blue Chip Stocks to Buy

5. NIKE, Inc. (NYSE:NKE)

Number of Hedge Fund Holders: 73

% Decline on a YTD Basis: ~20.3%

NIKE, Inc. (NYSE:NKE) is engaged in the designing, developing, marketing, and selling of athletic footwear, apparel, equipment, accessories, and services. Lorraine Hutchinson from Bank of America Securities reiterated a “Buy” rating on the company’s stock with a price objective of $80.00. The rating comes off the back of NIKE, Inc. (NYSE:NKE)’s promising progress in critical areas as well as strategic initiatives to fuel growth. Its leadership exhibited early success in categories such as running, and the company continues to engage with wholesale partners in order to gather feedback on upcoming products, says the analyst.

NIKE, Inc. (NYSE:NKE)’s marketing efforts are expected to fuel brand visibility and sales momentum. As per the analyst, the inventory management can further aid innovation and result in a healthy increase in sales. Furthermore, NIKE, Inc. (NYSE:NKE)’s proactive approach to navigate tariffs through adjustment of sourcing strategy and leveraging healthy vendor relationships places it well to manage external challenges, says Hutchinson. Also, the company’s scale offers a competitive advantage, enabling it to leverage consumer insights as well as maintain robust supplier relationships.

RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its Q4 2024 investor letter. Here is what the fund said:

“NIKE, Inc. (NYSE:NKE): NKE shares were a top detractor in the quarter following better than expected fiscal second quarter results reported in December but worse than feared third quarter guidance. The company delivered $13.4 billion of revenue (roughly $1 billion better than expectations) and $1.9 billion of EBIT (roughly $500 million ahead of street consensus) and generated better than expected earnings of $1.03 (investors were looking for $0.78). Despite better operating metrics last quarter, the company dramatically lowered expectations for the fiscal third quarter including expectations for double-digit percentage declines in revenue. NKE’s new CEO, Elliot Hill, described several key issues negatively impacting the company’s growth trajectory including 1) a multi-year move away from a focus on sports, 2) a shift away from innovative demand creating marketing, 3) too much centralization, which has led to lack of execution capabilities in local markets, and 4) too much focus on Nike Digital, which negatively impacted the brands standing in the marketplace.

Nike is, by far, the leading athletic footwear, apparel, and equipment company in the world with over $50 billion in revenue, $6.7 billion in FY2024 annual free cash flow, and $10 billion of excess cash. We believe that over the long term, the global secular growth trend towards active wear will continue to aid Nike’s top-line growth driving gross and operating margin improvements and long-term mid-teens or higher annual EPS growth. In the short term, we believe that the company will work through the above headwinds and that revenue and earnings growth will reaccelerate in the next 12 months.”