The sharp drop in Nike stock after the drop in earnings is a big opportunity. “The stock will be worth $100,” Jim Cramer said Friday morning, stressing the need to buy now despite pressure. Nike’s stock price fell more than 10%, trading at less than $59 per share, after Thursday night’s second-quarter fiscal 2026 earnings report revealed deteriorating sales in China. Nike felt the pain of the tariffs. Although sales in North America far exceeded expectations, the company announced disappointing guidance. All in all, it was further proof that the turnaround is tough and takes time. They are never linear. NKE YTD Mountain Nike YTD “There are two reasons to buy it,” Jim previously said on “Squawk on the Street.” The first reason is the pending Supreme Court ruling on the legality of the tariffs. Jim predicts that if a judge rules against the tariffs imposed by President Donald Trump, Nike’s stock price will quickly return to $70 a share. A decision by the High Court is expected early next year. Management did not talk about the Supreme Court justice. The second is Jim’s belief that Nike CEO Elliott Hill, who has been on the job for just 14 months, can reverse all the damage done under former CEO John Donahoe. “Mr. Hill is a different kind of CEO,” Jim said on the earnings call, praising Hill’s humility. Hill, a Nike veteran, came out of retirement to replace the fired Donahoe. He planned to revive the brand with a focus on wholesale relationships and a return to sports-centered innovation and store concepts. As for China, Jim didn’t bring it up, calling Nike’s performance in China “catastrophic.” None of Nike’s efforts in the region, including promotions and premium pricing, were successful. But Jim is confident Hill can restore Nike’s business to health in the world’s second-largest economy. “If China’s position changes, they’ll say, why didn’t we buy it at $80? So, yes, I’m a believer in Elliott,” Hill said on the earnings call. “The next step is to further adapt our approach to China’s unique mono-brand footprint and digital-first market. The reset will require new thinking, and that will take time.” Jefferies analysts also said in a note to clients on Friday that now is the time to buy Nike stock aggressively. After going to press Thursday evening, we maintained a rating of 1, which equates to a Buy. However, recognizing the China issue, we lowered our price target from $80 to $75 per share. (Jim Cramer’s Charitable Trust is a long NKE. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
