Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Nike Stock: Are Supply Chain Disruptions Worth Concern?

Stock MarketsSep 17, 2021 02:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters Nike Stock: Are Supply Chain Disruptions Worth Concern?

Nike (NYSE:NKE) stock finds itself down just over 9% from its peak hit back in early August.

While shares of the athletic apparel giant could sag further, I'd argue that the near-correction in the name provides a great entry point. I am bullish on the stock. (See NKE stock charts on TipRanks)

The company is still firing on all cylinders, but up ahead are some potential headwinds that are outside of Nike's control. Undoubtedly, the COVID-19 pandemic continues to cause supply chain disruptions across a wide range of industries.

You've probably heard of the chip shortage for many months on end. To this day, it still negatively affects many hardware makers. With factory shutdowns in Vietnam, it's the red-hot apparel retailers that look next in line to lose their step after an incredible first half to 2021.

Nike Runs into Supply Chain Disruptions

Just how bad are the supply chain disruptions in Vietnam? Apparently bad enough to bring forth the first of what could be a handful of analyst downgrades, with worries that such disruptions could impact coming quarterly earnings results.

Camilo Lyon of BTIG downgraded NKE stock to a Hold over the negative impact of the situation going on in Vietnam.

Nike seemed unstoppable, with unbelievable momentum exhibited in the last quarter and continued strength in its direct-to-consumer (D2C) business. So, it's a bit disheartening for shareholders to hear the company's epic run will be reduced to a walk.

There are no easy solutions to combat the worsening COVID-19 crisis going on in Vietnam. Still, if there's a company that can pivot in spite of supply chain disruptions, it's Nike. Arguably, Nike could adapt as effectively as Apple (NASDAQ:AAPL) did in response to the chip shortage.

As we inch closer to the holiday season, production cuts could mute Nike's fourth quarter. Regardless, I do think that Nike will pick up where it left off once the latest round of disruptions resolve themselves, however long this may take.

As such, any worsening of the latest dip in NKE stock ought to be viewed as more of a buying opportunity, and less of a chance to take profits after its recent sales momentum.

Wall Street's Take

According to TipRanks’ consensus analyst rating, NKE stock comes in as a Strong Buy. Out of 25 analyst ratings, there are 21 Buy recommendations, three Hold recommendations, and one Sell recommendation.

The average Nike price target is $187.26. Analyst price targets range from a low of $168 per share, to a high of $221 per share.

The bottom line on Nike stock

Nike is a magnificent company whose long-term fundamentals have never looked better. I expect D2C to pay huge dividends for many years to come.

Although a sneaker shortage could be in the cards for the holiday season, I do think Nike is experiencing a temporary bout of headwinds. Once such headwinds fade, it'll be off to the races again, and investors can expect the company to keep moving forward with products that will be in very high demand.

As consumers look to buy now, rather than wait for the holidays to roll around, Nike could have another epic quarter up its sleeves before the full impact of looming factory closures works its way into the results.

Disclosure: Joey Frenette owned shares of Apple at the time of publication.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

Nike Stock: Are Supply Chain Disruptions Worth Concern?
 

Related Articles

Tesla's Musk says Biden's EV bill shouldn't pass
Tesla's Musk says Biden's EV bill shouldn't pass By Reuters - Dec 06, 2021 5

SAN FRANCISCO (Reuters) - Tesla (NASDAQ:TSLA) Inc CEO Elon Musk said on Monday that the U.S. Congress should not approve the Biden administration's bill to boost subsidies for...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email