Wall Street analysts and shareholders are not bailing on Nike (NKE) stock despite its slide on Thursday.
Shares of the Oregon-based shoe and athletic apparel manufacturer have slipped after one of the company's key products failed, leading to an injury to Duke basketball star and projected No. 1 pick in the NBA draft, Zion Williamson.
Kian Salehizadeh, senior analyst at Blockforce Capital, an asset management firm that holds Nike stock in many of its ETF offerings, opined that the price action on Thursday is shortsighted.
"In the short term, the reaction is going to be negative given social media's impact," he explained. "Unless this is bigger than the Colin Kaepernick situation, the company should be able to get past this."
The recovery in share price that followed the Kaepernick endorsement on Sept. 4 was completely negated within a week of being one of Twitter's (TWTR) top trending topics.
Salehizadeh noted that this is suggestive of the short attention span of these social media-driven stock drops.
He cited the Nike's direct-to-consumer digital push and its continued expansion into China as more relevant, and more bullish, items to monitor for investors.
Salehizadeh added that the company's modest dividend yield should act as a bulwark against any investor anxiety as well, and is a driving factor in its inclusion in their products.
Analysts largely agreed, with the consensus remaining a buy on Wall Street. Many even lauded the slip in value as an entry opportunity at a discount.
"At this juncture, we are optimistic that while negative headlines might weigh upon NKE shares for a bit, any lasting damage to the company and its shares will prove minimal," Oppenheimer analyst Brian Nagel wrote in an update note. "Nike senior management has a history of acting masterfully at always protecting and enhancing the company's brand image with core customers, even through moments of pronounced consternation."
Nagel maintained his "Outperform" rating on the stock on the back of the stated confidence, slating a $100 price target for the stock.
A Needham & Co. analyst went a step further, urging investors to take advantage of the buying opportunity offered by what he expects to be a short-lived stock slide.
Real Money contributor Mark Sebastian summed up the sentiment in his column outlining options opportunities on the stock.
"I do not think this has any long-term effect on Nike, and if someone is selling their stock in Nike because of what happened last night (or buying Under Armour (UA) for that matter) ,they are making a mistake," he said. "These types of one-off public relations' messes almost never matter in the short or long run."
For his game plan in the options market, click here.
