Nike stock has fallen too much. Why it’s time to buy.

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Nike

the stock is up after Goldman Sachs said Now is a good time to buy.

Shares of Nike gained 1.9% to $153.09 on Tuesday morning after Goldman Sachs gave the apparel company a buy rating and a price target of $172. This would represent a 12% increase.

Nike stock had fallen 5.8% since reporting earnings on Sept. 23 through Monday’s close. Nike reported earnings of $1.16 per share, beating forecast by $1.12, on sales of $12.2 billion, missing forecast by $12.47 billion. He cited problems at factories in Vietnam, among other issues, for the lost profit. Nike also lowered its earnings forecast.

Still, Nike’s (ticker: NKE) supply issues are likely “transitory”, said analyst Kate McShane, while the drop after its third-quarter results represents a buying opportunity due to “a healthy industrial context with a continued company-specific focus on innovation to drive growth.

Nike still faces some problems. McShane says the recent reaction of Western brands in China could also impact app download levels, which could impact Nike’s sales. China accounts for around 20% of Nike’s revenue.

Still, McShane notes that despite declining Chinese app downloads, the company has historically overtaken its main competitor Adidas in terms of app downloads, having generated around 80% more downloads since the start of 2021, according to SensorTower. in September.

Despite these challenges, Goldman said Nike isn’t lagging behind.


S&P500

very often, and usually outperforms in the years following such underperformance.

If McShane is right, Nike stock could start to outperform again.

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