Nike is getting back its Street cred — at least as far as Jim Cramer is concerned. “I’m going to make a bull call here. I have not really cared for the stock of Nike in a long time. I think just as Lululemon descends, it’s time to buy Nike,” Cramer said Wednesday morning on CNBC’s “Squawk on the Street .” In fact, Cramer is so optimistic in Nike’s recovery potential that he’s “trying to figure out” whether it belongs in his Charitable Trust, the portfolio used by the CNBC Investing Club. The iconic sports apparel brand has struggled for the past few years as it countered an onslaught of issues including competition and excess inventory resulting from pandemic supply chain disruptions. Additionally, its decision to lean heavily into the direct-to-consumer channel, relying less on third-party retailers in the process, didn’t go as well as planned . “The key thing with Nike has been the inventories. Are they low enough? You have to anticipate … the bottom,” Cramer said, citing Nike’s partnership with major retailers like Foot Locker and its now-parent company, Dicks Sporting Goods, as a plus to its recovery efforts. Dick’s Sporting Goods completed its acquisition of the popular sneaker chain this week as part of a strategic plan to corner the Nike wholesale sneaker market. Cramer isn’t the only one on Wall Street seeing Nike’s comeback in real-time. On Wednesday, TD Cowen analysts also credited inventory management as one of the catalysts for Nike’s turnaround, upgrading the stock to a buy rating from hold. About half the analysts covering Nike have a buy-equivalent rating on shares, according to FactSet, compared with almost 70% three years ago. As part of its upgrade, TD Cowen upped its price target on Nike to $85 a share from $62. Analysts said Nike’s margin recovery is “underappreciated,” touting gradually improving trends at Nike and its important Jordan brand, as well as execution by Nike’s new management. Nike CEO Elliott Hill took over last October and has been working on the company’s rebound. Cramer is also bullish on Hill. “Elliott Hill understands the tradition,” he said. “He’s real. He’s bringing back the magic. There is magic there.”
