Nike is demoted and announces its exit from Russia; What’s next for NKE shares?

It appears that US sportswear giant Nike (NYSE:NKE) is exiting Russia altogether, three months after suspending operations in the country.

Notably, Nike is one of the latest global brands to leave Russia, with the news coming via email, Reuters reports.

Meanwhile, ahead of its June 27 earnings release, the company is receiving more skeptical criticism from Wall Street analysts, like Seaport Research Partners. downgraded the title to neutral on June 22. Prior to this degradation, there was a critical note by Morgan Stanely analyst Alex Straton, who expects more problems for Nike in China and that things will get worse before they get better.

“Whereas [fiscal 2023] EPS can fall below [the long term] supply chain/macro headwinds plan, [long term] the opportunity remains intact,” he concluded. “The long-term opportunity is the same for us, although 2023 could be another ‘transition’ year before NKE gets back on track. [with long term] targets. »

NKE chart and analysis

Meanwhile, since December 2021, the company’s shares have been in a bearish momentum with unusual peaks in trading volume in March and the second part of May. Right now, the stock is below all daily simple moving averages (SMAs), trading choppy between $100 and $120.

Chart of NKE 20-50-200 SMA lines. Source. data. See more shares here.

Nonetheless, analysts at TipRanks are rating the stock as a moderate buy, predicting that over the next 12 months the stock could reach an average price of $143.94, 36.33% higher than the current price of $105.58.

Wall Street NKE analyst price targets for NKE. Source: TipRanks

Currently, sentiment for Nike doesn’t seem too hot, as stocks are down more than 35% year-to-date (YTD), while companies like Morgan Stanley and Seaport Research Partners pile in to reiterate. their neutral position or downgrade the shares of the company.

Moreover, macroeconomic conditions are not ideal; with a possible recession on the horizon, consumers may decide to reduce their purchases of sportswear.

Likewise, slowdowns in China due to more recent Covid-related shutdowns have put strain on supply chains and consumers buying only basic necessities. Investors should be cautious and possibly look for better entry points with more volatility in the action ahead.

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Disclaimer: The content of this site should not be considered investment advice. The investment is speculative. When you invest, your capital is at risk.

Darryl A. Chapin