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  Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">website policy</a>&nbsp;prior to making financial decisions. 
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<p class="has-drop-cap">Shares of Nike fell for a third consecutive trading session on Tuesday, bringing its year-to-date losses to over 20%. With this year’s performance, Nike is currently the second worst-performing Dow Jones Industrial Average (DJIA) <a href="https://tokenist.com/investing/how-to-buy-stocks/" rel="noopener noreferrer nofollow" class="deco-link">stock</a>. However, opportunities for a rebound remain.&nbsp;</p> 
<h3 id="why-is-nike-trending-downwards-in-2023">Why is Nike Trending Downwards in 2023?</h3> 
<p>On Tuesday, Nike’s shares fell around 1% to $94.62, marking a fresh 10-month low for the apparel giant. The new downswing widened Nike’s year-to-date losses to more than 20%, with the stock significantly underperforming the broader S&amp;P 500 market index and the second worst-performing DJIA component.&nbsp;</p> 
<p>The company’s 2023 downturn can be attributed to a combination of factors, including weakness in broader markets, worries over its near-term outlook, margin pressures, and the <a href="https://tokenist.com/msci-china-index-continues-losing-streak-down-8-this-year/" rel="noopener noreferrer nofollow" class="deco-link">ongoing headwinds in China</a>, one of Nike’s key markets.</p> 
<p>Nike conducts roughly a third of its business in China, meaning a further slowdown in the world’s second-biggest economy could result in additional pressures on the retailer’s margins. Last month, data revealed that China’s retail sales in July increased by 2.5% year-over-year, significantly below expectations, while youth unemployment soared.&nbsp;Most of China’s current issues are due to its <a href="https://tokenist.com/chinas-biggest-property-developer-expects-to-post-7-6b-loss-for-h1-2023/" rel="noopener noreferrer nofollow" class="deco-link">collapsing property sector</a>. </p> 
<p>Moreover, Nike is struggling with swollen inventory levels plaguing the broader retail industry as consumers pivot towards services.&nbsp;</p> 
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<h3 id="lots-of-growth-opportunities-for-nike">Lots of Growth Opportunities for Nike</h3> 
<p>But it’s not all doom and gloom. Despite struggling with financial performance and stock price action, Nike’s shares have plenty of opportunities to recover.</p> 
<p>Notably, the Beaverton, Oregon-based company expects revenue to hit mid-single digits in the fiscal year 2024 and estimates its gross margins to climb between 140-160 basis points. In line with the company’s optimism, analysts also predicted a double-digit jump in Nike’s earnings for the 2023 and 2024 fiscal years.&nbsp;</p> 
<p>Earlier this week, Wells Fargo strategists <a href="https://ph.investing.com/news/stock-market-news/wells-fargos-recent-checks-point-to-near-term-risk-for-nike-432SI-986283" target="_blank" aria-label="maintained an Overweight rating (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">maintained an Overweight rating</a> on NKE stock, though they reduced the price target from $130 to $120 per share, implying plenty of potential upside. The bank’s analysts also trimmed numbers below the Wall Street consensus, citing near-term risks.&nbsp;</p> 
<p>Nike also sees its Jordan brand as a vital catalyst and believes it could become the second-biggest footwear brand in North America. At its current share price, Nike trades at a reasonably low valuation, with the next 12-month (NTM) price-to-earnings multiple of 26.2x, representing a notable discount to its 5-year and 10-year multiples.&nbsp;</p> 
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<p><em><strong>Do you think Nike stock will manage to end 2023 on a higher mark than now? Let us know in the comments below.&nbsp;&nbsp;</strong></em></p> 
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/nike-is-20-down-ytd-but-can-it-run-again/">Nike is 20% Down YTD, But Can it Run Again?</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Nike is 20% Down YTD, But Can it Run Again?

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