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BTIG Downgrades Nike From Buy To Neutral – Supply Chain Disruptions Continue

By John F. Heerdink, Jr.

Reportedly, BTIG has downgraded NIKE, Inc. (NKE) rating from Buy to Neutral amid supply chain disruptions. The rising COVID-19 cases in Vietnam with its fully vaccinated rate of only between 4% and 5% has forced Vietnamese government officials to close down manufacturing facilities throughout the country.

“We believe the risk of significant cancellations beginning this holiday and running through at least next spring has risen materially for NKE as it is now facing at least two months of virtually no unit production at its Vietnamese factories which accounted for 51% of footwear and 30% of apparel units,” stated BTIG senior analyst Camilo Lyon.

BTIG senior analyst Camilo Lyon revealed that moving manufacturing operations is not likely in the cards for Nike.

“Nike is the best company in the world, it’s also one of the largest. So when we talk about them shifting their production, we’re talking about a battleship turning, it’s a very long drawn out process,” stated Lyon on changing manufacturing locations in the interim from Vietnam.

Logistics are not the only issue in Nike’s way when it comes to shifting production within Asia. China could be a possible shift if problems continue to persist in Vietnam. However, Lyon raised that the Trump administration’s tariffs imposed on Chinese imports are still in effect.

NIKE, Inc. (NKE) is the world’s top designer, marketer, and distributor of athletic footwear, equipment, apparel, and accessories. The Beaverton, Oregon-based company offers products for a wide variety of sports and fitness activities. To learn more about NIKE, Inc. (NIKE) and to continue to track its progress please visit the Vista Partners NIKE Coverage Page.

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(Read Original Story: Nike downgraded by BTIG amid continuing COVID-related supply chain disruptions in Yahoo Finance)


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