Is Nike finished? That’s the question Jim Cramer posed on CNBC Friday morning in the wake of what he called a “very egregious” analyst downgrade. “We’re trying to figure out if that’s a mistake or if we can give (CEO Elliott Hill) a reprieve until October,” Jim said later at a morning assembly for club members. October is significant because it marks Hill’s two-year anniversary at the helm of Nike. Since taking over as CEO, Hill has launched a turnaround strategy called “Win Now.” We are focused on restoring Nike to its status as a respected brand by prioritizing our love of sports, driving innovation, repairing relationships with our retail partners, and rebuilding our leadership. “It’s a very difficult business,” Jim acknowledged, but said he plans to keep his shares for now. NKE YTD Mountain Nike’s year-to-date stock performance. Nike stock fell another 3% on Friday to trade in the low $40s after Piper Sandler downgraded Nike from a “buy” rating to “equivalent to hold” and lowered its price target from $60 to $50 per share. Piper analysts cited concerns about Mr. Hill’s management appointments, many of whom have worked at Nike for decades. “We are concerned that getting the rebuild right will require more outside perspectives than NKE veterans,” the analysts wrote. Piper also expressed concern that athleisure has become “too saturated” and that Nike is “still overly reliant” on the success of classic brands like the Air Force 1, Air Jordan and Dunk. On Friday, reports surfaced that Nike’s head of innovation is leaving the company after less than a year in the job. Tony Binnell will be replaced by Andy Cain starting Sunday, according to the Wall Street Journal. Kane is vice president and creative director of Nike’s sportswear division. In further evidence that Hill’s turnaround has taken longer than expected and will continue to take longer than expected, Nike reported on March 31 that third-quarter fiscal 2026 sales were flat and earnings per share were down 35% from the same period last year. The outlook for the fourth quarter was also disappointing. Analysts don’t expect Nike to return to annual sales growth until the February 2027 quarter. In response, the stock fell 15% after the April 1 earnings call, and has only risen in two sessions since then. At the time, several Wall Street firms, including JPMorgan, downgraded Nike stock as they were forced to temper expectations for future earnings. The club similarly downgraded the stock to a Hold equivalent rating of 2. A rating of 2 typically means you should consider buying more shares during a rebound. Under the right circumstances, Nike’s drop on Friday could have been an opportunity. Jim said he was thinking of “buying something.” But he admitted he “doesn’t have the catalyst.” Editor’s note: This article has been updated with news of Nike’s innovation leadership reorganization. (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.
