NKE stock was trading upwards at $86.24 as of 02:53 PM EDT.
Argus downgraded Nike’s (NYSE:NKE) rating on Monday from Buy to Hold. According to analyst John Staszak, the company’s high inventory level—which was observed to have climbed by 44% to $9.7B in the fiscal first quarter of 2023—is the reason for the downgrade on the athletic apparel behemoth.
According to Staszak and crew, Nike (NKE) will have to lower prices to get rid of this inventory, which will have an adverse effect on margins and earnings in the upcoming quarters.
Nike Stock Fell Despite Beating Q1 Profits And Sales On The Back Of The Company’s Strong Brand
Nike (NYSE:NKE), which is also included in the mix, is reportedly dealing with sluggish Chinese sales as well as growing prices and difficulties related to foreign exchange. The long-term picture for Nike (NKE) is still more promising, according to Argus, despite the caution in the near term.
NKE stock outlook
Nike has a strong presence in high-end footwear, given its marketing prowess and endorsements from well-known top athletes, so we anticipate that it will continue to rule the sports apparel and footwear industries. Despite the strong competition in the market, we anticipate the company to strengthen its leadership through its well-known brand, cutting-edge products, economies of scale, and quick expansion in emerging regions.
Nike (NYSE:NKE) saw a rise of 0.73% on Monday after starting the week at its 52-week low.
Q4 report
The corporation reported a 22% decrease in net income to $1.5 billion for the duration ending in August, as per its quarterly update to investors. Increased transportation costs and heavier markdowns, according to the company, have hurt profit margins. As a result of supply chain challenges, the total quantity of inventory grew by 44% to $9.7 billion in the same period.
The company did, however, reveal that its sales for the same period increased to $12.7 billion, exceeding Wall Street expectations.
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Author Jowi Kwasu