Analyst: Chinese Macro Headwinds Threaten Blue-Chip Stock

The analyst cited macro headwinds from China

Jake Scott

Deputy Editor

Sep 25, 2023 at 8:59 AM

Jefferies downgraded blue-chip apparel maker Nike Inc (NYSE:NKE) to "hold" from "buy," and cut its price target to $100 from $140. The analyst said an "incremental risk" exists due to lackluster U.S. wholesale demand and Chinese macro headwinds.

In response, Nike stock is down 1.7% in premarket trading, looking to open at $89.35 -- its lowest level since November. Coming off of a record losing streak, NKE's 10-day moving average has guided shares lower in recent weeks. Year to date, the stock is down 22.4%.

There's room for additional optimism to unwind amongst the brokerage bunch. Coming into today, 19 of 26 covering analysts rate Nike stock a "buy" or better. Further, the 12-month average price target of $121.90 is a 34.2% premium to Friday's close.

Now might be the time to speculate on the security's next move with options. NKE's Schaeffer's Volatility Scorecard (SVS) sits at a high 89 out of 100, meaning it has exceeded option traders' volatility expectations during the past year.

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