Billionaire investor Bill Ackman’s Pershing Square Capital Management increased its stake in Nike (NKE) stock by 15% during the fourth quarter. The move reflects Ackman’s confidence in the sportswear giant’s long-term growth prospects despite recent challenges.
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Nike stock has dropped 28% over the past year. The company’s sales have declined in China, one of its key markets, due to higher competition from local brands and changing consumer preferences. Further, Nike’s recent Super Bowl ad featuring female athletes like Caitlin Clark, Jordan Chiles, and Sha’Carri Richardson stirred controversy. The ad focused on gender equality and women’s rights in sports. While some praised the ad for advocating social causes, others argued it was too political, leading to backlash and calls for a boycott. Managing the fallout from this controversy is another key challenge for the company.
Nevertheless, Ackman’s investment in Nike signals his belief in the company’s ability to navigate these challenges. Importantly, the company’s strong brand name, efforts to introduce new products, and global expansion moves might support its performance in the long term.
Ackman Remains Bullish on BBU Stock, Cuts Down on CMG and HLT
In addition to investing in Nike, Ackman’s Pershing Square also increased its position in Brookfield Corp. (BBU), a global infrastructure and alternative asset manager. According to the latest 13F filing, the firm added over 2.15 million shares in Q4. It is worth noting that Brookfield remains the largest holding in Ackman’s portfolio.
On the other hand, Ackman reduced positions in the restaurant company Chipotle Mexican Grill (CMG) and hotel chain Hilton Worldwide (HLT) by 14% and 26%, respectively. This move suggests a reevaluation of the hospitality and dining sectors, possibly due to concerns about economic headwinds or shifting consumer preferences.
Is NKE a Good Stock to Buy?
Turning to Wall Street, NKE stock has a Moderate Buy consensus rating based on 15 Buys and 14 Holds assigned in the last three months. At $85.88, the average Nike stock price target implies 17.58% upside potential.
