Nike drops on what Cramer calls a 'damning' downgrade. His plans next for the stock

Is Nike done? That's the question Jim Cramer posed Friday morning on CNBC after what he called a "very damning" analyst downgrade. "I've been trying to figure out whether it is a mistake or whether we can give [CEO Elliott Hill] till October," Jim said later on Morning Meeting for Club members. October is important because it will mark the second anniversary of Hill assuming the helm at Nike. Since taking over as CEO, Hill has launched a turnaround strategy called "Win Now." It focuses on getting Nike back to its revered brand status by prioritizing the love of sport, driving innovation, repairing relationships with retail partners, and restructuring leadership. "It's a very hard business," Jim acknowledged, but he said he's inclined to stay with the stock for now. NKE YTD mountain Nike's year-to-date stock performance. Shares of Nike lost another 3% on Friday, trading in the low $40s, after Piper Sandler downgraded Nike to a hold-equivalent rating from buy and cut its price target to $50 a share from $60. Piper analysts cited concerns about Hill's leadership appointments, many of whom have worked at Nike for decades. "We worry if the correct execution of the turnaround requires more outside perspective as opposed to NKE veterans," the analysts wrote. Piper also expressed worries that athleisure was becoming "too saturated," and that Nike is "still overly dependent" on the success of its classic brands, which include Air Force 1, Air Jordan, and Dunk. In further proof that Hill's turnaround is taking and will continue to take longer than expected, Nike on March 31 reported flat revenue in its fiscal 2026 third quarter, with earnings per share down 35% year over year. Guidance for fiscal Q4 was also disappointing. Analysts don't expect Nike to return to annual sales growth until the February 2027 quarter. In response, the stock experienced a 15% post-earnings slide on April 1 and has only been higher in two sessions since. At the time, several Wall Street firms, including JPMorgan, downgraded Nike stock as they were forced to temper expectations on future earnings. The Club did as well, taking shares down to our hold-equivalent 2 rating . Typically, our 2 rating means we would consider buying more stock on a pullback. Under better circumstances, Friday's Nike decline could have been an opportunity. Jim said he would have loved "to buy some." But he conceded, "I don't have a catalyst." (Jim Cramer's Charitable Trust is long NKE. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.