NIKE is still drawing buyers even as one major bank turned more cautious on the stock. Nicholas Company Inc. raised its stake in the sportswear maker by 33.3% in the fourth quarter, while Wells Fargo downgraded the shares to Equal Weight from Overweight and cut its price target to $45 from $55.
In its latest SEC filing, Nicholas said it owned 123,652 shares worth $7,878,000 after adding 30,890 shares. Brighton Jones LLC lifted its position by 388.5% in the same quarter to 202,411 shares valued at $15,316,000 after buying 160,980 shares. Caxton Associates LLP opened a new stake in the first quarter worth $311,000, and other firms also added to their holdings in later periods. Institutional investors owned 64.25% of NIKE’s stock.
The buying comes as NIKE stock faces a rougher market backdrop. Wells Fargo said a GLP-1-driven shift in consumer behavior could become a new headwind for athletic wear demand, and reported that bets against NIKE have surged. The company is also dealing with weak earnings, revenue pressure and restructuring costs, while moving ahead with nearly 1,400 job cuts tied to its Win Now overhaul.
Those pressures have hit the share price. NKE opened Monday at $44.10, near the low end of its 12-month range of $42.09 to $80.17 and below its 50-day simple moving average of $50.16 and 200-day average of $59.14. The stock has a market capitalization of $65.31 billion, a price-to-earnings ratio of 29.21 and a price-to-earnings-growth ratio of 2.34.
NIKE’s balance sheet metrics remain intact, with a quick ratio of 1.45, a current ratio of 2.14 and a debt-to-equity ratio of 0.50. The board also declared a quarterly dividend of $0.41 per share. The next question for investors is whether the recent institutional buying reflects confidence in a turnaround or just a bet that the selloff has gone far enough.
