Wells Fargo Lowers Nike (NKE) Rating as Global Turnaround Takes Longer Than Expected

NIKE, Inc. (NYSE:NKE) is included among the 10 Best Stocks to Buy Now for a $1 Million Portfolio.

On May 8, Wells Fargo downgraded NIKE, Inc. (NYSE:NKE) to Equal Weight from Overweight and lowered its price target to $45 from $55. The firm said Nike no longer fits with its view that clothing companies are likely to outperform over the next few years. Wells Fargo noted that the broader shift away from athletic apparel, along with what it described as “over-saturation” from rising competition, is creating fundamental challenges for the company. The analyst also said Nike’s global turnaround is taking longer than expected and added that disruption in international markets is likely to weigh on results in the near term.

Earlier, on April 27, Oppenheimer said Nike introduced a new Kobe collaboration called the “Kobe Siempre Hermanos” and “Siempre Mio.” According to the firm, channel checks showed the Kobe basketball shoes sold out within minutes. Oppenheimer added that the Air Force 1 collaboration remained available online only. The firm described the Kobe franchise launches as “another green shoot” for Nike. Oppenheimer also said the releases offered “yet another proof point, that where Nike is focused, consumers, are responding well.” The firm maintained an Outperform rating on Nike shares and said it remains positive on the company’s turnaround potential.

NIKE, Inc. (NYSE:NKE) designs, markets, and distributes athletic footwear, apparel, equipment, accessories, and related services for sports and fitness activities.

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