To say the least, Wednesday was not the best day for a stock to be hit by a price target drop. But that was the situation with the best sportswear manufacturer Nike (NYSE: NKE)whose shares closed down 5.6% – a steeper drop than even the terrible 4% suffered by the Baron S&P500 stock index
Bank of America (NYSE: BAC) Securities analyst Lorraine Hutchinson was the person wielding the blade. On Wednesday morning, she adjusted her position in Nike shares with a price target of $125 per share from $140 previously. However, this does not change Hutchinson’s recommendation on equities, which remains neutral.
The reasons behind the Bank of America The tipster’s move was not immediately apparent.
Additionally, Nike investors may be concerned about a report published Tuesday in the FinancialTimes. Citing an internal company email and “people familiar with the matter,” the article says Nike’s head of talent, diversity and culture, Felicia Mayo, is stepping down from her role, effective from the end of July.
She would be the second leader to leave the post in as many years, the London-based newspaper reported. While Nike isn’t known as a company with high executive turnover, some might worry that Mayo’s apparent resignation indicates some level of dissent or dissatisfaction within the C-suite.
While not particularly positive, none of these elements are negative enough to warrant a nearly 6% sale of Nike.
However, we need to look at this in context. Wednesday was a very discouraging day for investors, particularly due to the disappointing quarterly results posted by retail titan Target, until recently a very high-flying stock. By ripple effect, stocks in retail and consumer discretionary sectors have also been liquidated, sometimes considerably. If anything, then Nike fell victim to bad timing that day.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in the stocks mentioned. The Motley Fool holds positions and endorses Nike. The Motley Fool has a disclosure policy.
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