Teal Linde Nike Inc NKE-N DON'T BUY Mar 17, 2025

Have a new CEO, so give him time. Shares could be down one more leg--then buy--before it moves up.

It reports Thursday. The CEO will need to explain how the company will reignite the brand globally and show innovation. It's amazing how much damage the last CEO did, something that won't be easy to fix.

Bought in the last 6 months. Turnaround story of 2-3 years, but fixable. Phenomenal brand. Reporting tomorrow. For new $$, he tends to wait for earnings. See what comes tomorrow. Valuation of 28x looks rich, but it's because earnings have been hit so hard.

Is -30% on the past year. Remember, they have changed management, so don't sell it. See what the new CEO does.

Its peers are coming back, but Nike has a tough road ahead. Is -31% the past year. It looks cheap, but it will take several quarters for the activist investor to improve the company. It's dead money for 3-6 months.

Trades around 20x PE. Options: implied volatility is over 30, so you're paid twice as much as the broader market. Because the stock has been under pressure for a long time, these options are more expensive than others. Currently, at May $70 puts you can get $3.90, an attractive 5% return if shares stay flat over 3 months. 

Added recently around current level of $77. Online push didn't work; it can be part of the business, but not the main part. New CEO has gone back to basics. Huge FCF, minimal debt. Incredibly well positioned. Chance to buy on sale the world's best business in the sector.

Hold, if you already own. Maybe earnings will accelerate, but it's expensive now. Good CEO. Buy if it falls to the low $70s.

Nike has lost its edge. ON is a better company, and Nike's peers aren't standing still as Nike turns around.