Guggenheim reiterates a buy rating on Nike stock
Yahoo Finance Live anchors break down Thursday’s analyst calls as Guggenheim reiterates a Buy rating on Nike stock.
Video Transcript
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BRIAN SOZZI: Now, time for our Call of the Day. Despite Nike's inventory woes and margin pressure, Guggenheim is feeling good about the sneaker giant. The investment bank is maintaining its $135 price target and buy rating on the athleisure maker, calling it its best idea into 2023. Or another way of looking at this, they're saying, just do it. [LAUGHS] Just buy the stock. Oh, I couldn't. I can't. I can't.
BRAD SMITH: That too.
BRIAN SOZZI: It's not Friday. Had to let it out.
JULIE HYMAN: Did you know that the man who invented that slogan has just died?
BRIAN SOZZI: Really? Way to bring my energy--
JULIE HYMAN: Yes.
BRIAN SOZZI: --down.
JULIE HYMAN: I'm so sorry.
BRIAN SOZZI: Yeah, I was so excited.
JULIE HYMAN: But yeah.
BRIAN SOZZI: But now I'm not.
JULIE HYMAN: But it's an amazing achievement, so.
BRIAN SOZZI: Great, just ruin my whole--
JULIE HYMAN: Sorry.
BRIAN SOZZI: --thing right here. My whole buzz.
JULIE HYMAN: Sorry.
BRIAN SOZZI: Well, I'll try to bring us--
JULIE HYMAN: Sorry.
BRIAN SOZZI: --back. So interesting note bye Guggenheim--
JULIE HYMAN: [LAUGHS] Sorry.
BRIAN SOZZI: I love-- I'm a big fan of Robert [? Durbel's ?] work, he actually notes at the top of this report that he's been covering the company for about 20 years. It feels like I've been following him for 20 years.
But he does note that, while profits are under pressure, he does still like Nike's brand equity. It likes its grand-- its scale around the world, likes its structural advantage in terms of its supply chain. And he goes on to say, again, some pretty cool charts, that-- yes, Brad, you wear Nike's?
BRAD SMITH: Not today.
BRIAN SOZZI: And I know I'm--
JULIE HYMAN: I was just checking [INAUDIBLE].
BRAD SMITH: I'm wearing a brand that's--
BRIAN SOZZI: I saw the eyes. I saw the eyes move down. They're Nike.
BRAD SMITH: Yes.
BRIAN SOZZI: But [? Durbel ?] also notes that, "We would note that Nike has a history of quick operating margin recovery from steep macro driven drops." And we might be looking-- I think investors might be looking for that to happen very, very soon.
BRAD SMITH: I'm wearing a brand today that was formerly owned by Nike. They divested from Cole Haan.
JULIE HYMAN: Oh--
BRIAN SOZZI: Cole Haan.
JULIE HYMAN: --yes.
BRIAN SOZZI: I like Cole Haan.
BRAD SMITH: Not before making them really revolutionary, at least with the different soles that Cole Haan would use, in the Lunar Line from Nike. But again, I mean, this is really just kind of leaning into that brand equity that Nike has.
And we were actually tossing around some of the stats that Julie was pulling earlier, before the show. 22 out of the past 25 years, Nike has beat the S&P 500 performance here. And so you continue to think about what the brand has done over that time, whether it's some of the different acquisitions, making strategic decisions to get out of certain sports or at least equipment-making in some sports, that's really led to the company being able to financially put those dollars, that capital, to work elsewhere. And the cultural partnerships that they've been able to make over time as well that keep them in the spotlight.
JULIE HYMAN: I just bought a new pair of sneakers.
BRAD SMITH: Yeah, which ones?
JULIE HYMAN: I did not buy Nikes.
BRAD SMITH: Really?
JULIE HYMAN: I bought Sauconys. I tried on a pair of Nikes.
BRAD SMITH: They're good, though.
JULIE HYMAN: I tried on a pair of Sauconys.
BRAD SMITH: Good running shoe.
JULIE HYMAN: It's not for running. It's just for [? caj, ?] for comfortable shoe.
BRIAN SOZZI: What happened to your retro Reeboks? No go? You didn't pull the trigger?
JULIE HYMAN: I didn't. Not yet. Not yet. I'm still--
BRAD SMITH: Oh, the Cardi B one.
JULIE HYMAN: Im still thinking about.
BRAD SMITH: Yes.
JULIE HYMAN: I'm still thinking-- I'm still--
BRIAN SOZZI: OK. Do it.
JULIE HYMAN: --percolating.
BRIAN SOZZI: It's only $60.
JULIE HYMAN: Just do it?
BRIAN SOZZI: Just do it. Buy them now.
BRAD SMITH: All right. Well, we're gonna continue to track shares of Nike here on throughout the rest of the day on that. But--
