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Trading Lululemon’s 30% Surge Amid Earnings Growth

The recent stock market downturn has been attributed to a variety of factors. Two fundamental factors are high inflation and rising interest rates.

In times of high inflation, investors look for stocks with strong price power — the ability to pass higher costs on to consumers.

Stocks like Nike could fit into that bill, although there are some broader risks if consumer activity falls.

Learn more about Nike stock, analyst forecasts, and recent hedge fund activity in this article.

Every trade involves high risk and you can lose more than your risk in the trade. Never invest more than you can afford to lose because some trades will lose and some trades will win. Start small to understand your own risk tolerance, or practice on a demo account. Build your knowledge first before investing.

Why trade? nike stock?

According to investment bank UBS research, firms with price power tend to handle periods of inflation better than others. They can pass higher fees to their customers.

As US inflation has risen to levels not seen since 1982, this factor has become even more important. There are several ways to measure pricing power. Investment banks focus on the “premium,” or the company's ability to price its product above its own marginal cost.

Interestingly, the company's strong price strength has outpaced weak price strength by around 20% since 2021. According to UBS, there are five names with strong pricing power, of which Nike is only one.

One concern for consumer-related stocks like Nike is that a drop in consumer spending could hurt overall sales. However, because Nike is considered the number one sports retailer in the world, they have room to offer promotions while protecting profits.

Last month, Nike said its business in China is now starting to improve as the country's supply chain issues have eased and the recent backlash against Western brands has eased. Nike's latest earnings report showed that sales in China fell 8%, a better-than-expected 12% decline and a 24% decline in the previous quarter.

With China being Nike's most profitable market, a rebound in the region could help offset global sales if US consumer spending slows.

Data from 13 filing reports retrieved by the regulator's TipRanks of the Securities and Exchange Commission (SEC) showed that the hedge fund also started to increase its position with 537,000 share purchases in the last quarter.

nike stock forecast – what dotdia analysts have to say?

There are currently 17 buy, 5 hold, and 0 sell recommendations for the stock, according to analysts surveyed by TipRanks for Nike stock forecasts over the past 3 months. The highest price level for Nike stock is $185.00 and the lowest price target is $106.00.

The average target price for the Nike stock forecast is $154.14. This represents an uptrend of more than 43% from current levels at the time of writing.

Exemplary trading ideas for nike Stock prices

An example of a trading idea for a Nike stock forecast might look like this:

Buy the stock on a break above $124.00 to account for current market volatility and future profits.

Target just below the $154.00 analyst average price target.

Keep your risk low with a maximum of 5% of your total account.

Term = 1-6 months

If you buy 10 shares of Nike:

If target is met = $300.00 potential profit ($154.00 – $124.00 * 10 shares).

It is wise to keep in mind that stock prices are unlikely to rise in a linear fashion and could actually drop further before bouncing higher, especially given the recent sell-off in global stock markets.

Therefore, pay attention to good risk management, which is one of the most important aspects of successful trading. You should always be aware of how big your potential loss is in trading and the risks involved.

Another factor to consider is the commission as it can affect your profits. The Admirals Invest.MT5 account allows you to buy US stocks starting at $0.02 per share. This means that buying 10 shares of Nike will result in a commission of $0.20 ($0.02 * 10 shares).

There is a low minimum transaction fee of $1. So the example trading idea above will generate a total commission of just $1!