Why Nike Stock Is Running Higher Friday
Being in Nike (NYSE: NKE) stock hasn't exactly been a winning game in recent years. Shares of the iconic athletic shoe maker have badly trailed the returns of the S&P 500 index over the last decade.
But Nike shares are running higher today. After jumping nearly 9% Friday morning, as of 10:35 a.m. ET, the stock was still trading higher by 5.8%. That's because investors hope the stock's long-lasting slump is coming to an end with a CEO replacement.
Nike's been losing the race
Nike was a high-flying stock for years. But since Nike's last stock split, -- a 2-for-1 split on Dec. 24, 2015 -- its total return, which includes dividends, has been 41% compared to the S&P 500 index return of 225%.
But yesterday the company said it was replacing CEO John Donahoe with company veteran Elliott Hill effective Oct. 14. Hill worked at Nike for over three decades prior to retiring in 2020 after Donahoe was named CEO. Investors today think that change will be a good thing and aren't waiting to buy Nike stock.
The decision was approved by Donahoe himself. In a statement he said, "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."
Hill was president of Nike's consumer division and oversaw marketing and commercial successes including the Michael Jordan brand before leaving the company. Investors are welcoming his return, as competitors including Deckers Outdoor's Hoka One One brand and On Holding have been taking market share.
Nike may give investors an idea of what Hill has planned when it reports its first-quarter fiscal 2025 financial results on Tuesday, Oct. 1.
Should you invest $1,000 in Nike right now?
Before you buy stock in Nike, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nike wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $722,320!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 16, 2024
Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool recommends On Holding. The Motley Fool has a disclosure policy.
