Nike(NYSE: NKE) shares have been on the defensive of late, but at least one Wall Street analyst believes the stock has bottomed out. Shares of Nike climbed 3% on Thursday after the stock was upgraded at Bank of America.
Better days ahead?
It's been a rough few years for Nike holders, with the stock losing about half of its value since mid-2021. The company is in the process of rethinking a lot of its retail initiatives, including its focus on direct-to-consumer over retail and its scattershot approach to branding.
Bank of America analyst Lorraine Hutchinson believes the stock is finally at an inflection point. The analyst, who has had a neutral rating on Nike shares for almost three years, upgraded the stock to a buy and boosted her price target by $3 to $113.
The consensus 2025 Nike profit estimate is down 35% over the past two years, Hutchinson said, and "finally looks achievable," especially with upcoming catalysts including the Summer Olympics on the horizon.
Is Nike stock finally a buy?
Nike admitted it had made some mistakes during its last earnings call, announcing plans to turn the business around by focusing on product innovation and culling the number of styles in its catalog. That reorg will take time to play out and could cause some near-term weakness, but it appears the company is headed in the right direction.
Nike is a long way removed from the "Just Do It" era when it could seemingly do no wrong, but the company still has a fantastic brand and impressive market share in the athleisure clothing sector. Hutchinson is on track pointing out how far Nike expectations have fallen, and her point about upcoming catalysts is well made.
Given enough time, buying Nike today offers the opportunity for investors to notch a lot of wins in the future.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and Nike. The Motley Fool recommends the following options: long January 2025 $47.50 calls on Nike. The Motley Fool has a disclosure policy.
