Shares of Nike (NYSE: NKE) have been in the red recently, but one Wall Street analyst thinks the company has hit rock bottom. On Thursday, Nike shares rose 3% following an upgrade at Bank of America.
Will tomorrow be better? Investors in Nike have had a hard few years, as the stock has lost about half of its value since the middle of 2021. Many of the company's retail efforts are currently under review, including its branding strategy and its emphasis on direct-to-consumer rather than retail.
Lorraine Hutchinson, an analyst at Bank of America, thinks the stock has reached a turning point. For the first time in almost three years, the analyst raised her price objective for Nike shares from $109 to $113 and rated the stock as a buy.
It "finally looks achievable," according to Hutchinson, the consensus profit projection for Nike in 2025, which has dropped 35% in the previous two years, thanks to forthcoming triggers like the Summer Olympics.
Should I finally invest in Nike stock? During its previous earnings call, Nike acknowledged it had made some mistakes and announced steps to bring the company around.
The company will concentrate on product innovation and reduce the number of designs in its catalog. The reorganization may lead to temporary setbacks while it takes effect, but overall, the corporation seems to be moving in the right path.
Despite the fact that Nike has come a long way since its "Just Do It" days, when it appeared to be able to do no wrong, the athleisure clothing sector continues to see tremendous growth for the brand.
Hutchinson makes a valid point on forthcoming catalysts, and she is correct in pointing out how low Nike's expectations have dropped. Investors who purchase Nike shares now have a good chance of reaping large rewards in the long run.
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