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
-
Could This Little Known Data Shift Hurt Your 2026 Social Security COLA?The BLS has changed how it measures the inflationary data that determines whether Social Security benefits will get a Cost-of-Living Adjustment (COLA). Will it hurt your benefits?
-
Financial Pros Provide a Beginner's Guide to Building Wealth in 10 YearsBuilding wealth over 10 years requires understanding your current financial situation, budgeting effectively, eliminating high-interest debt and increasing both your income and financial literacy.
-
Financial Pros Provide a Beginner's Guide to Building Wealth in 10 Years
Building wealth over 10 years requires understanding your current financial situation, budgeting effectively, eliminating high-interest debt and increasing both your income and financial literacy.
-
Five Mistakes to Avoid in Your First Year of RetirementRetirement brings the freedom to choose how to spend your money and time. But choices made in the initial rush of excitement could create problems in future.
-
I'm an Investing Expert: This Is How You Can Invest Like Warren BuffettBuffett just invested $15 billion in oil and gas, and you can leverage the same strategy in your IRA to potentially generate 8% to 12% quarterly cash flow while taking advantage of tax benefits that are unavailable in any other investment class.
-
Integrity, Generosity and Wealth: A Faith-Based Approach to BusinessEntrepreneurs who align their business and financial decisions with the biblical principles of integrity, generosity and helping others can realize impactful and fulfilling success.
-
How to Invest as the AI Industry Grows UpHere’s where to find the winners as artificial intelligence transitions from an emerging technology to an adolescent one.
-
How Much Income Can You Get From an Annuity? An Annuities Expert Gets SpecificHere's a detailed look at income annuities and the factors that determine your payout now and in the future.
-
Your Paycheck Stops in Retirement, But Your Life Doesn't: An Expert Guide to Planning for a Confident FutureSocial Security will replace only about 40% of your salary, on average. A solid financial plan will help you plug the gap so you can rest easy in retirement.
-
Are You Jeopardizing Your Future to Help Your Adult Kids? An Expert Guide for How to Not Do ThatIf your adult child needs financial help, of course you want to provide it, but crafting a plan that also protects your financial and emotional well-being is vital.
