NIKE, Inc. (NYSE:NKE) is included among the 12 Best DOW Stocks to Buy in 2026. RBC Lowers Nike (NKE) Target but Sees Path to Profitable Growth Intact On January 6, RBC Capital Markets lowered its price target on NIKE, Inc. (NYSE:NKE) to $78 from $85 and kept an Outperform rating. The firm said Nike’s path to profitable growth remains intact, even if the timeline has stretched. Pressure from Greater China, weakness at Converse, and US tariffs are weighing on margins, the analyst wrote. Even after 8%–10% e ...

Company Overview - O'Reilly Automotive, Inc. (ORLY) has a market cap of $76.3 billion and is a leading retailer and supplier of automotive aftermarket parts, tools, equipment, and accessories across the United States, Puerto Rico, Mexico, and Canada [1] - The company offers a wide range of products and services for both do-it-yourself and professional automotive repair, including maintenance items, accessories, professional tools, and enhanced programs such as battery testing, recycling, and custom hydraulic hose services [1] Financial Performance - O'Reilly Automotive is set to announce its fiscal Q4 2025 results soon, with analysts predicting an EPS of $0.72, representing a 9.1% increase from $0.66 in the same quarter last year [2] - For fiscal 2025, analysts forecast an EPS of $2.97, an 8.4% growth from $2.74 in fiscal 2024, and an anticipated increase of 11.1% year-over-year to $3.30 in fiscal 2026 [3] Recent Earnings and Stock Performance - The company reported stronger-than-expected Q3 2025 earnings of $0.85 per share and revenue of $4.71 billion, raising the lower end of its full-year revenue forecast to $17.6 billion - $17.8 billion, driven by strong demand for replacement auto parts [5] - Despite the positive earnings report, the stock fell 2.9% the following day [5] - Over the past 52 weeks, shares of O'Reilly Automotive have returned 12%, lagging behind the S&P 500 Index's 16.2% gain but outperforming the State Street Consumer Discretionary Select Sector SPDR ETF's 6.8% rise [4] Analyst Ratings - Analysts maintain a bullish consensus view on ORLY stock, with a "Strong Buy" rating overall; among 28 analysts, 21 recommend "Strong Buy," three give "Moderate Buy," and four indicate "Hold" [6] - The average analyst price target for O'Reilly Automotive is $112.08, suggesting a potential upside of nearly 24% from current levels [6]

Core Insights - Stitch Fix, Inc. (SFIX) reported a strong start to fiscal 2026, with Revenue per Active Client (RPAC) reaching $559, a 5.3% year-over-year increase, marking the seventh consecutive quarter of growth [1][8] - Average Order Value (AOV) rose nearly 10% this quarter, indicating the ninth consecutive period of year-over-year growth, attributed to a reimagined client experience [1][8] - The company closed the fiscal first quarter with 2.3 million active clients, reaching the high end of expectations, while management emphasized a disciplined approach to rebuilding the active client base [3][8] Financial Performance - The improvement in RPAC reflects increased spending per active client, supporting Stitch Fix's ability to capture a greater share of wallet from its existing client base [2] - The Zacks Consensus Estimate indicates year-over-year earnings growth of 9.1% for the current year and 56.7% for the next year [12] Competitive Landscape - Designer Brands, Inc. (DBI) reported a 3.2% decline in net sales but improved profitability with gross profit increasing to $339.6 million [5] - GAP, Inc. (GAP) posted net sales of $3.9 billion, a 3% year-over-year increase, but faced pressure on profitability with a gross margin decline to 42.4% [6] Market Position - Stitch Fix's shares have gained 28.3% in the past six months, outperforming the industry's rise of 12%, and currently holds a Zacks Rank 2 (Buy) [7] - From a valuation perspective, SFIX trades at a forward price-to-sales ratio of 0.5, significantly lower than the industry's average of 1.98 [10]

Core Viewpoint - Under Armour Inc. (NYSE:UA) has experienced a significant increase in share prices, rising by 14.44% week-on-week, reaching a new four-month high, driven by increased investment from Fairfax Holdings [1][2]. Group 1: Share Price Movement - Under Armour's share price surged by 14.44% week-on-week, marking a new four-month high [1]. - The rally in share prices was influenced by Fairfax Holdings, which increased its stake in Under Armour [2]. Group 2: Investment Activities - Fairfax Holdings, a Canada-based financial services firm, raised its stake in Under Armour through a series of acquisitions, becoming a 10% owner [2]. - On December 30, Fairfax acquired $67 million worth of additional shares, including over 11.5 million Class A shares and 1.67 million Class C shares, at average prices of $5.1408 and $4.9474, respectively [3]. - Prior to this, from December 22 to 29, Fairfax purchased an additional 15.68 million Class A and C common shares at average prices of $4.6133 and $4.4055 [4]. Group 3: Company Performance - Under Armour reported a net loss of $18.8 million for the second quarter of fiscal year 2026, a decline from a net income of $170.38 million in the same period the previous year [5]. - Revenues decreased by 5% year-on-year, falling to $1.33 billion from $1.40 billion, primarily due to lower revenues from North America, wholesale, and apparel segments [5].

Core Insights - SGA's U.S. Large Cap Growth Strategy reported a portfolio return of -1.3% (Gross) and -1.4% (Net) in Q3, underperforming the Russell 1000 Growth Index which returned 10.5% and the S&P 500 Index which returned 8.1% [1] - The investment strategy focuses on high-quality growth businesses expected to achieve consistent mid-teens earnings growth, but faced challenges as lower-quality stocks and cyclical industries outperformed in the market [1] Company Analysis: NIKE, Inc. (NYSE:NKE) - NIKE, Inc. is recognized as an iconic sportswear brand that promotes a healthier lifestyle through its innovative products, which include athletic and casual footwear, apparel, and accessories [3] - The stock of NIKE, Inc. experienced a one-month return of -3.01% and a 52-week decline of 13.52%, closing at $63.71 per share with a market capitalization of $94.176 billion on December 31, 2025 [2] - NIKE's pricing power is supported by its strong brand and technology, with a robust supply chain that gives it an advantage over competitors, who have lower margins and would be more adversely affected by price wars [3] - The company benefits from repeatable revenues, with 65% of sales coming from shoes, a category known for customer loyalty, and is experiencing mid-single-digit revenue growth in developed markets, while growth in emerging markets is even faster due to increased sports participation and e-commerce sales [3]

Group 1: Plains All American Pipeline (PAA) - The company is a master limited partnership (MLP) involved in the transportation, storage, terminalling, and marketing of crude oil, natural gas, natural gas liquids (NGL), and refined products in the U.S. and Canada [1] - The Zacks Consensus Estimate for its current year earnings has increased by 4.9% over the last 60 days [1] - The company has a dividend yield of 8.5%, which is higher than the industry average of 6.3% [2] Group 2: The Gap (GAP) - The company is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products [2] - The Zacks Consensus Estimate for its current year earnings has increased by 2.9% over the last 60 days [2] - The company has a dividend yield of 2.6%, compared to the industry average of 0.0% [2] Group 3: Analog Devices (ADI) - The company is an original equipment manufacturer of semiconductor devices, specifically analog, mixed signal, and digital signal processing (DSP) integrated circuits [3] - The Zacks Consensus Estimate for its current year earnings has increased by 5.3% over the last 60 days [3] - The company has a dividend yield of 1.4%, which is higher than the industry average of 0.0% [3]

Core Insights - The U.S. stock market has faced significant volatility in early 2025 due to trade policy changes under the new Trump administration, aggressive tariffs, and growing Sino-U.S. trade tensions [1][2] - The federal reserve rate cuts have lowered borrowing costs, positively impacting corporate profitability despite rising manufacturing costs and supply chain issues [2][3] Market Conditions - Trade-related risks and changes in monetary policy have led to frequent stock price fluctuations, but tech stocks have driven positive market momentum [3] - The overall annual inflation rate in 2025 was lower than expected despite a hike in energy prices [3] Growth Drivers for 2026 - Rapid AI infrastructure buildouts are anticipated to be a key growth driver across various industries, requiring substantial investment in computing infrastructure and data centers [4] - Companies with stable earnings and robust cash flow are expected to benefit from the emerging trends in AI investment [4] Company Highlights - **IBM**: Positioned as a major player in the AI landscape, with a free cash flow of $2.37 billion in Q3 2025, and a quarterly dividend of $1.68 per share, yielding 2.2% [7][9][10] - **Analog Devices, Inc. (ADI)**: Benefiting from strong growth in industrial and defense sectors, with an operating cash flow of $4.81 billion in fiscal 2025 and a quarterly dividend of 99 cents per share, yielding 1.43% [12][13][14] - **Johnson & Johnson (JNJ)**: Expected accelerated growth in its Innovative Medicine segment, with $17.22 billion in cash from operating activities and a quarterly dividend of $1.3 per share, yielding 2.5% [15][16] - **The Gap, Inc. (GAP)**: Strong brand performance and market share growth, with net cash from operating activities of $607 million and a quarterly dividend of 16 cents per share, yielding 2.52% [19][20] - **Hewlett Packard Enterprise (HPE)**: Benefiting from traction in the AI networking market, generating $2.5 billion in cash from operating activities and a quarterly dividend of 14 cents per share, yielding 2.33% [21]

Core Viewpoint - Analysts are cautious about Nike Inc.'s stock performance, with recent price target reductions indicating concerns over inconsistent recovery and future revenue outlook [1][2]. Financial Performance - Nike reported a total revenue increase of 1% year-over-year, amounting to $12.43 billion, which exceeded estimates by $218.31 million [3]. - The company achieved an EPS of $0.53, surpassing guidance by $0.16 [3]. Sales Channel Performance - There was a notable shift in sales channels, with wholesale revenues growing by 8% globally, while Nike Direct revenues declined by 9% [3]. - Nike Digital sales experienced a significant drop of 14%, contributing to the overall decline in direct sales [3]. Regional Performance - North America showed strong performance with a 9% overall revenue increase, driven by a 24% surge in wholesale growth [4]. - In contrast, Greater China faced challenges, with revenue decreasing by 16% and Nike Digital sales dropping by 36% [4]. - Other international regions also reported declines, with EMEA revenue down 1% and APLA revenue falling 4% [4]. Analyst Ratings - UBS analyst lowered the price target for Nike to $62 from $71, maintaining a Neutral rating [1]. - Stifel analyst cut the price target to $65 from $68 while keeping a Hold rating, citing difficulties in justifying significant stock upside due to Nike's current valuation premium [2].

Market Outlook - The S&P 500 is expected to reach new all-time highs before the end of the year, requiring a 3% increase in the final eight and a half trading sessions [1] - A significant broadening of the market is noted, with more 52-week highs and an increase in stocks above their 50-day and 200-day moving averages [1] - High-yield corporate bonds are trading less than 1% away from all-time highs, indicating that recent tech volatility is not a precursor to a broader market collapse [1] 2026 Market Theme - Broadening is anticipated to be the main theme for 2026, with recent tech weakness viewed as a standard consolidation after a record-breaking 13-day win streak [2] - Historical patterns indicate that midterm years are typically the weakest in the presidential cycle, often experiencing a 17.5% peak-to-trough correction [2] - The current bull market is in its fourth year, with historical data suggesting that bull markets of this age last an average of eight years [2] Nike Inc. (NYSE:NKE) Analysis - Nike's total revenue for FQ2 2026 increased by 1% year-over-year to $12.43 billion, exceeding estimates by $218.31 million [10] - The company reported an EPS of $0.53, beating guidance by $0.16, but faced a disappointing FQ3 outlook with a forecast for low-single-digit decline in topline [9][10] - North America showed a 9% revenue increase, driven by a 24% surge in wholesale growth, while Greater China faced a 16% revenue decline [11] Ondas Holdings Inc. (NASDAQ:ONDS) Analysis - Ondas Holdings reported a more than sixfold year-over-year revenue surge to $10.1 million in Q3 2025, primarily driven by its Autonomous Systems division [15] - The company's consolidated backlog doubled to $23.3 million, with expectations to exceed $40 million by year-end, prompting a revenue target increase for 2025 to ~$36 million and an ambitious goal of ~$110 million for 2026 [15] - Analysts have a positive outlook on Ondas, with Stifel initiating coverage with a Buy rating and a $13 price target, citing its potential in the unmanned systems market [13][14]

Core Viewpoint - Michael Burry's bullish perspective on Lululemon suggests that the company's recent struggles may present a buying opportunity for investors, as he believes the pessimism surrounding the stock is overdone [1][20][24] Company Overview - Founded in 1998 and headquartered in Vancouver, Lululemon designs and markets athletic apparel, footwear, and accessories for both men and women, targeting consumers with active lifestyles [1] - The company has a market capitalization of $24.8 billion and operates globally through various channels, including company-owned stores, outlets, and e-commerce platforms [5] Recent Performance and Challenges - Lululemon's stock has declined over 60% from its all-time high of $516.39 in December 2023, primarily due to softening U.S. demand, product cycle issues, and increased competition [6][12] - The company has faced operational challenges, including management's acknowledgment of stale product lines and the need for improved execution, leading to two cuts in full-year guidance [4][12] - Lululemon is set to exit the Nasdaq 100, which may trigger further selling as index funds rebalance [3] Financial Results - In Q3, Lululemon reported a 7.1% year-over-year revenue increase to $2.57 billion, driven by a 33% surge in international revenues, while net revenues in the Americas fell by 2% [12][18] - Earnings per share (EPS) for Q3 was $2.59, down 9.8% year-over-year, reflecting margin pressures from higher markdowns and tariffs [13] - The company has a strong balance sheet with $1 billion in cash and no debt, and it plans to continue share buybacks [14] Future Outlook - For Q4, Lululemon expects revenues between $3.5 billion and $3.59 billion, with EPS projected at $4.66 to $4.76, indicating near-term margin pressure but a steadier long-term trajectory [18] - The company plans to open 17 net new stores in Q4 and 46 for the full fiscal year 2025, with a focus on international expansion, particularly in China [15][17] Analyst Sentiment - The consensus rating for Lululemon is currently "Hold," with only three out of 30 analysts recommending a "Strong Buy" [22] - Following a recent rally, LULU stock has surpassed the average price target of $205.65, but the highest target of $303 suggests potential upside of nearly 42% [23]