Nike (NKE) stock is trading notably higher in Friday's session after the athletic footwear and apparel retailer announced the appointment of a new CEO.
Effective October 14, Elliott Hill will take over as president and CEO of Nike, replacing current chief executive John Donahoe, the company said in a regulatory filing. Hill spent 32 years at Nike in various roles before retiring in 2020 as president of its consumer and marketplace division.
"Nike has always been a core part of who I am, and I'm ready to help lead it to an even brighter future," Hill said in a statement. "For 32 years, I've had the privilege of working with the best in the industry, helping to shape our company into the magical place it is today. I'm eager to reconnect with the many employees and trusted partners I've worked with over the years, and just as excited to build new, impactful relationships that will move us ahead."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Outgoing CEO John Donahoe has held the role since January 2020, but a myriad of struggles has led to a decline of roughly 20% in Nike's share price over his tenure prior through the September 19 close.
Most notably, Donahoe's efforts shifted the company's strategy to one that focused on selling directly to consumers in its stores and online, but this decision moved it "too far away from wholesale partners," according to CNBC. It also caused Nike to it losing sight of innovation and created a lack of new product launches, CNBC said.
"It's been an honor and privilege to be part of this incredible company, and I'll always value my time at Nike and the opportunity to lead the organization," Donahoe said in a statement. "It became clear now was the time to make a leadership change, and Elliott is the right person. I look forward to seeing Nike and Elliott's future successes."
The C-suite shake up comes a little over a month after regulatory filings revealed Bill Ackman's Pershing Square Capital Management initiated a stake in the blue chip stock in the second quarter. The activist investor previously held a stake in Nike back in 2017.
Is Nike stock a buy, sell or hold?
Nike has struggled in 2024, down 25% for the year to date through the September 19 close, putting it just ahead of Intel (INTC) and Boeing (BA) on the list of worst Dow Jones stocks. Still, Wall Street is generally bullish toward the consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for NKE stock is $92.11, representing implied upside of more than 8% to current levels. Additionally, the consensus recommendation is Buy.
While financial services firm Truist Securities has a Hold rating on NKE stock, it raised its price target to $85 from $81 following the appointment of the new CEO.
"We see this move as a positive step that could reinvigorate the brand and improve sentiment on the stock, as Mr. Hill is highly respected and has deep knowledge of the business from his 32-year tenure at Nike," says Truist Securities analyst Joseph Civello.
"However, the near-term upside appears priced into the after-market move," which makes the large-cap stock pricey at current levels despite "no projected revenue growth," he adds.
Related Content
-
AI Goes To SchoolThe Kiplinger Letter Artificial intelligence is rapidly heading to K-12 classrooms nationwide. Expect tech companies to cash in on the fast-emerging trend.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
Where to Invest in an Uncertain Market
In an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
My First $1 Million: Events Industry CEO, 65, Northern New JerseyEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Stock Market Today: Investors Look on the Bright SideA generally good week closes on another positive note, as investors, traders and speculators look for fresh catalysts.
-
My Three-Day Rule for Investing: And If it Applies NowStock Market I've seen a lot in my career. Here's what I see now in the stock market.
-
Such Attractive Yields in High-Grade Munis Are Rare and May Not Last LongAccording to this munis expert, the last time munis were this cheap was a brief period in 2023. If you kicked yourself for missing out then, you have a second chance now.
-
Financial Analyst Sees a Bright Present for Municipal Bond InvestorsHigh-tax-bracket investors have an excellent opportunity to secure low-volatility, high-quality returns at yield levels rarely seen in over a decade.
-
I'm an Insurance Pro: How Not to Get Dumped by Your Insurance AgentYour insurance agent or broker might show you the door if you do any of these five things. Being a good customer is about more than paying your bill on time.
