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Nike just isn’t doing it anymore for some folks. Despite efforts to keep the company running, experts are saying Wall Street’s sentiments towards Nike Inc. have become negative.
This follows a recent fall in the company’s stock, with shares reaching their lowest point since 2014. “The stock price is reflecting the market’s realization that the turnaround might take a little bit longer than it had thought maybe six months ago or 12 months ago,” UBS analyst Jay Sole said in an interview with Bloomberg.
Concerns that Nike is losing its image as a premium, high-end brand are leading multiple major banks, including UBS, JPMorgan, and Goldman Sachs, to pull back their previous optimistic ratings. Investors have taken the opportunity to buy shares while the stock is low. Apple’s Chief Executive Officer, Tim Cook, who sits on Nike’s board of directors, disclosed that he bought 25,000 Nike shares on April 10, according to a regulatory filing.
“Over the last 10 years we’ve seen more competition emerge, focused specifically on that higher income demographic, and that’s made the competitive landscape a little bit tougher for Nike than it used to be,” Sole said.
Slipping Off
Nike owns several marquee brands that have helped the company grow—like Jordan’s. Meanwhile, brands like Cole Haan have faltered completely. A current issue for the company is Converse, which has been down 35% year-over-year and sparked talks of a sale.
In a recent earnings call, Nike president and chief executive officer Elliott Hill made a decisive note to bring Converse’s brand back to a healthy place. This included layoffs at the brand in February.
“While we are not satisfied, I am confident that our progress in the areas we prioritize: first, through our Win Now actions, point to where we are ultimately heading across our portfolio,” said Hill.
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