TIME TO BUY NIKE ?

We observed a significant decrease in Nike's price-to-earnings (P/E) ratio from 78.6 to 21, representing a multiyear low between 2020 and the present.

Nike's stock has declined by 60% from its historical peak, prompting observations regarding market irrationality in driving the company's P/E ratio to its lowest level since 2017. Consequently, purchasing Nike stock has become a compelling proposition for investors, corroborated by the recommendations of Wall Street analysts. Guggenheim analysts have identified the stock's potential value at $115 per share, indicating a potential 36.9% upside from current levels.

HSBC has initiated coverage of On Holding, maintaining a "hold" rating, while Citi continues to uphold a buy rating on Nike stock despite concerns about sales in China.

Institutional investors responded to the decline by purchasing Nike shares, catalyzed by the announcement of hedge fund Pershing Square, under the leadership of Bill Ackman, acquiring a new stake in the company. This move was further supported by Pershing Square Capital Management, led by billionaire investor William Ackman, acquiring approximately 3 million Nike shares. Bernstein SocGen Group maintained an "Outperform" rating on Nike, citing improvements in the brand's performance metrics.

Anticipated growth in sales driven by the Olympics and basketball is expected to provide an additional boost to Nike.

We await the forthcoming fiscal Q3 '24 earnings report from Nike, scheduled for September 24, 2024, as an indicator of potential recovery.

In conclusion, it is advisable to closely monitor the upcoming quarterly results.