What's Next For Nike (NKE) as Chairman Phil Knight Steps Down?
NEW YORK (TheStreet) -- Nike (NKE) - Get Report co-founder Phil Knight officially retired from his role as Chairman of the Board, handing the reigns to CEO Mark Parker, a move announced one year ago.
Knight leaves the company amid some murky times for the stock, as it is at the bottom of the Dow and lower by 10% in the 2nd quarter. This is due to "concerns over the strong dollar, and business in China." Leaving many investors to ponder whether or not the stock has peaked, CNBC's Sara Eisen reported on "Squawk on the Street."
Another concern the company is left with is in regards to global markets, especially those in the U.K. and in Europe. Nike does 5% of its total revenue in the U.K., and even much larger percentages in the rest of Europe. With these markets diminished it has the potential to further cut into the company's revenues.
Nike has higher inventories and lower gross margins, as well as future orders that are lower than what some analysts had predicted, according to CitiGroup (C), CNBC noted.
Despite the lack in growth, "Nike is still a good stock and that a lot of the buyers have stepped in, actually after that sharp sell-off after earnings in the after-hours because it was getting too cheap," Eisen reiterated.
Shares of Nike stock are trading higher by 0.76% to $55.62 on Friday.
Separately, TheStreet Ratings rates Nike as a Buy" with a ratings score of "B". This is driven by a number of strengths, which TheStreet Ratings believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks TheStreet Ratings covers.
The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. TheStreet Ratings feels its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
You can view the full analysis from the report here: NKE