Down 55%, This Blue Chip Stock Is a Good Buy for Long-Term Investors

Core Insights - Nike is undergoing a leadership change with the appointment of Elliott Hill as CEO, effective October 14, to refocus on its core strengths and innovation [2][3] - The stock has seen a significant decline of nearly 55% since its all-time high in November 2021, with a 24% drop in 2024 alone, presenting a potential buying opportunity for long-term investors [1][8] - Nike's current price-to-earnings (P/E) ratio is approximately 23.1, which is significantly lower than the 84 it reached in late 2021, indicating it may be fairly priced compared to competitors [4][5] Leadership Transition - The previous CEO, John Donahoe, had a mixed tenure, with initial growth driven by COVID-19 but later struggles attributed to a lack of creative and design experience [2] - Incoming CEO Elliott Hill brings decades of experience at Nike, which may help restore the company's innovative edge [3] Financial Performance - Nike has been actively engaging in stock buybacks, repurchasing nearly $1.2 billion in the latest quarter, which reduces the number of outstanding shares and increases earnings per share [6][7] - The buyback activity signals management's belief that the stock is undervalued, especially in light of its recent decline [7] Market Position - Despite recent challenges, Nike remains a leader in the athletic apparel and footwear market, with brand power that is difficult for competitors to match [5] - The company’s recent missteps are viewed as a temporary setback in its long history of success [5]