Why Nike Is on The Verge of a Massive Comeback Rally

Core Viewpoint - Nike Inc. has experienced a significant decline in stock value, dropping 60% from its all-time high in late 2021, and is currently trading at levels last seen in 2018, prompting increased scrutiny from Wall Street [1][2] Group 1: Company Performance - The year 2024 was mixed for Nike, with solid headline number beats but squeezed margins due to rising costs and competition [2][3] - Despite year-over-year revenue decline, Nike finished 2024 positively, exceeding expectations in its December earnings report [3] Group 2: Leadership Changes - The appointment of Elliott Hill as the new CEO is generating optimism among analysts and investors, as he is known for driving operational efficiency and revitalizing brands [3][6] - February's earnings report will be critical to assess Hill's impact on the company's performance [3] Group 3: Analyst Sentiment - Analysts have recently upgraded their ratings on Nike, with Piper Sandler raising its rating from Neutral to Overweight and setting a price target of $90, indicating a potential upside of approximately 30% [5][6] - Other firms like DA Davidson, Truist Financial, and Robert W. Baird have also issued Buy ratings, reflecting confidence in Nike's recovery [6] Group 4: Technical Indicators - Nike's stock is currently considered oversold, with a Relative Strength Index (RSI) of 28, suggesting a potential bounce back [9] - The stock is testing a long-term support level from 2018, which may provide a foundation for future gains [10] Group 5: Market Outlook - Analysts are generally bullish about Nike's potential turnaround, with expectations of a return to profitable growth by late 2025 [6] - Despite some caution from a minority of analysts, the overall sentiment leans towards optimism for investors looking for entry points [8][11]