New Nike Price Target After Surprise Turnaround
Nike shares are rising after a long slump, but how high will the stock run?
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
Shares of athletic wear giant Nike NKE gained nearly 4% on Monday, making it the day's best-performing stock for the venerable index.
An upgrade from a J.P. Morgan Chase analyst helped drive the stock to a four-month high. Analyst Matthew Boss sees retail demand on the rise for the footwear icon, as Nike’s once-bloated inventories return to normal levels.
From Hero to Zero to Hero Again?
Beaverton, Oregon-based Nike has been one of the worst performers on the Dow Jones Industrial Average in recent years. Shareholders have watched this stock fall for three consecutive years, losing 29.8% in 2022, 7.21% in 2023 and 30.3% in 2024.
In the five years leading up to 2022, Nike shareholders enjoyed annual double-digit gains. Shares climbed 23.06% in 2017, 18.53% in 2018, 36.65% in 2019, 39.64% in 2020 and 17.81% in 2021.
Readers Were Warned in 2022
Clearly, 2022 marked a major turning point for the stock. We warned readers in early 2022 that Nike’s winning streak was about to end. Over the past five years, Nike shares (left chart) have lost 18.8%, while the Dow Jones Industrial Average (right chart) has gained nearly 70%:
However, in recent months, Nike shares have turned around. Nike has formed a bullish channel (black dotted lines) on its daily chart since early April, creating a series of high highs (HH) and higher lows (HL) within that channel.
Nike is also trading above its 50-day (blue) and 200-day (red) moving averages, with the 50-day MA closely mirroring the low end of the stock’s bullish channel. Those two key moving averages could be headed for a crossover, an indicator of bullish momentum.
Zooming out to the weekly chart, Nike still needs to break above a long-term bearish trend line (black dotted line). That trend line has been intact for over three years.
Nike shares need to trade above $81 to break that line. If Nike can climb above $82.44, it will form a higher high by eclipsing the stock’s year-to-date high (red arrow).
New Price Target for Nike: $97
Assuming that Nike can break its bearish weekly trendline, the next major resistance for the stock is in the $97 area. Last June, Nike shares fell sharply from that area after the company missed revenue estimates for the three-month period ending in May 2024.
At the time of publication, Ponsi was long NKE.
