Nike stock is seeing gains as the general market remains relatively flat. This is due in part to hedge funder Bill Ackman’s Pershing Square Capital Management purchasing more than 3 million shares of Nike. Ackman is known for his focused portfolios, and Nike is now one of the top 10 positions in his hedge fund’s portfolio. This news has caused the stock to rise alongside lower Consumer Price Index (CPI) inflation data.
In addition to Ackman’s investment in Nike, the preliminary Michigan Consumer Sentiment Index for Friday came in above consensus, indicating a positive outlook among US consumers. The Dow Jones Industrial Average also added another 100 points on Friday, contributing to the overall positive sentiment in the market.
Pershing Square Capital Management acquired 3.04 million shares of Nike stock in the second quarter of the year, making up 2.17% of the portfolio. Ackman has previously held shares of Nike, exiting in 2017 for a significant gain. The hedge fund also made purchases in Brookfield Corporation and Seaport Entertainment Group in Q2, while reducing stakes in Chipotle Mexican Grill and Hilton Worldwide, among others.
Analysts have shown interest in Nike following Ackman’s investment, with positive evaluations from Williams Trading and Evercore ISI. Evercore ISI’s Michael Binetti shared his belief that Nike is taking the necessary steps to execute a turnaround, and BMO Capital Markets included Nike in its list of high-quality stocks earlier in the week.
The Dow Jones Industrial Average, one of the oldest stock market indices, consists of 30 of the most traded stocks in the US. The index is price-weighted, and its performance is influenced by a variety of factors, including company earnings reports, macroeconomic data, and interest rates set by the Federal Reserve. Dow Theory, developed by Charles Dow, is a method used to identify the primary trend of the stock market by comparing the direction of the DJIA and the DJTA.
Investors can trade the DJIA using ETFs, futures contracts, options, and mutual funds to gain exposure to the index. Nike’s stock forecast has shown improvement as shares have risen from the low $70s to the low $80s, surpassing the 50-day Simple Moving Average for the first time since June. The $89 level will be a key test for Nike shares, followed by the 200-day SMA near $96. Long-term support for Nike stock from the summer is at $71. Overall, Nike’s stock forecast is positive following recent developments and analyst evaluations.
