Nike Stays Put as Dow's Top-Performing Stock

Companies and Brands

Published: July 14, 2018 8:35 am

Last Updated: January 11, 2020 9:01 pm

Athletic gear maker Nike Inc. (NYSE: NKE) tightened its hold as the top-performing Dow Jones industrials stock for the year to date. The shares added about 1.2% last week, following a gain of more than 13% combined in the prior two weeks. For the year to date, Nike stock is up 23.7%.

The second-best performer among the Dow index equities so far this year is Microsoft Corp. (NASDAQ: MSFT), which is up 23.25%. That is followed by Visa Inc. (NYSE: V), up 22.28%, Boeing Co. (NYSE: BA), up 19%, and UnitedHealthGroup Inc. (NYSE: UNH), up 17.4%. Of the 30 Dow stocks, 14 have managed to post a gain to date in 2018.

The Dow regained the 25,000 level on Friday after a month in the doldrums. The blue-chip index added about 563 points over the course of the past week to close at 25,019.41, up about 2.3% from the previous Friday’s close. The Dow closed up less than 1% for the second quarter but down 1.8% for the first six months of 2018.

Nike opened a new store with a new concept last week in West Los Angeles. The concept is called Nike Live, and the store is named Nike by Melrose, presumably because it is located on Melrose Avenue. According to the announcement, “the store is a uniquely curated home for NikePlus Members and the style, sport and speed-obsessed consumers of the city.” The company touts the store as supporting its “efforts to unite digital and physical shopping experiences … and to further personalize the NikePlus Member in-store journey.”

The company also has been declared the winner of the World Cup soccer tournament ahead of Sunday’s championship match between France and Croatia. Nike supplies the gear for both teams, and even though most fans buy their stuff before the tournament begins, team gear for the winner typically gets a sales bump.

The Wall Street Journal published an interesting piece on the impact on Nike of the #MeToo movement. Elizabeth Winkler writes that investors could be making a mistake by buying stock in companies like Nike just because stock prices have dropped following executive resignations: “[B]ad behavior by executives is evidence of weak governance and a flawed corporate culture.” A Morningstar analyst counters that Nike’s fundamentals haven’t changed and that “#MeToo issues are not seen as so serious as to be material, at least in the short term.” That’s exactly Winkler’s point.

Nike’s shares closed Friday at $77.38, well off the 52-week high of $81.00 set in the previous week. The 52-week low is $50.35, and the consensus 12-month price target on the stock is $81.02.