NKE Should I Buy
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Nike Inc (NKE) is not a strong buy for a beginner, long-term investor at this time. The company is facing challenges with weak revenue growth, declining margins, and a slow turnaround. While insider buying and brand strength are positives, the stock's technical indicators are bearish, and analysts have lowered price targets, reflecting cautious sentiment. Given the investor's preference for long-term growth, it would be prudent to wait for clearer signs of recovery before committing funds.
The technical indicators for NKE are bearish. The MACD is negative and expanding downward, the RSI is neutral at 36.351, and the moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading near its support level of 60.907, with resistance at 62.492. There is no clear upward momentum in the short term.
Insider buying has increased significantly by 343.77% over the last month, indicating confidence from company insiders.
Nike's brand strength remains intact, as highlighted by UBS, which could support long-term recovery.
Weak financial performance in Q2 2026, with net income dropping 31.90% YoY and gross margin declining by 6.92%.
Analysts have downgraded the stock and lowered price targets, citing challenges in North America and Greater China.
The stock has declined 56% over the past five years, reflecting weak investor confidence and operational struggles.
In Q2 2026, Nike's revenue increased marginally by 0.59% YoY to $12.43 billion. However, net income dropped significantly by 31.90% YoY to $792 million, and EPS fell by 32.05% YoY to $0.53. Gross margin also declined by 6.92% to 40.6%, indicating cost pressures and operational inefficiencies.
Analysts are cautious on Nike. KeyBanc lowered its price target to $75, Needham downgraded the stock to Hold, and Deutsche Bank resumed coverage with a Hold rating and a $67 price target. While some analysts see long-term potential, most agree that the turnaround will take time, with significant challenges in key markets like Greater China and North America.
