High Inflation is Crushing These 5 Stocks

3. NIKE, Inc. (NYSE:NKE)

Number of Hedge Fund Holders: 67

NIKE, Inc. (NYSE:NKE) is an American manufacturer of athletic footwear, apparel, equipment, and accessories worldwide. In addition to inflationary pressures on retail, Nike is also facing troubles in China. Exane BNP Paribas analyst Laurent Vasilescu on August 9 downgraded NIKE, Inc. (NYSE:NKE) to Neutral from Outperform with a price target of $118, down from $151. The analyst observed that NIKE, Inc. (NYSE:NKE)’s FY25 financial targets were redacted in the latest 10-K and there is increased uncertainty about the FY25 targets being met. These targets may be “on pause” due to higher uncertainty in China and NIKE, Inc. (NYSE:NKE) facing possible market share losses and elevated discounting in the U.S., its biggest market, added the analyst. NIKE, Inc. (NYSE:NKE) stock has shed more than 31% in value year to date as of August 10. 

According to Insider Monkey’s data, 67 hedge funds were bullish on NIKE, Inc. (NYSE:NKE) at the end of Q1 2022, compared to 68 funds in the prior quarter. Ken Fisher’s Fisher Asset Management featured as the leading stakeholder of the company, with 8.3 million shares worth $1.11 billion. 

Here is what ClearBridge All Cap Growth Strategy has to say about NIKE, Inc. (NYSE:NKE) in its Q4 2021 investor letter:

“Nike is another play on e-commerce as well as the anticipated growth in consumer spending as we learn to live with COVID-19. After selling out of the stock in 2016 due to competitive concerns, we were motivated to repurchase shares because of optimism around a new management team’s focus on accelerating Nike’s shift toward e-commerce and direct-to-consumer (DTC) distribution. Near-term supply chain issues in Vietnam and retail weakness in China that we see as ephemeral provided a good buying opportunity. We do not believe the market is giving proper credit to Nike’s potential to deliver attractive, high-single-digit revenue growth while delivering operating margin expansion as more merchandise is sold directly. Nike is also still under indexed to the women’s category, which we see as a significant ongoing catalyst.”