Does Nike (NKE) Stand at an Attractive Risk Reward Setup?

Soumya Eswaran

Mon, May 18, 2026 at 11:00 AM EDT 3 min read

Matrix Asset Advisors, an asset management company, released its Q1 2026 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2026, the stock market declined by -4.33% after three years of gains, initially lifted by strong earnings and expectations of interest rate cuts. However, following military actions in Iran on February 28, rising oil prices, higher interest rates, and heightened economic uncertainty lowered stock prices. Technology, Consumer Discretionary, and Financials were the sectors with the lowest quarterly performance. The top-performing sectors were consumer staples, utilities, and energy. Despite these challenges, Matrix’s portfolios performed relatively well, with the Dividend Income portfolio achieving a small positive return and the LCV portfolio outpacing the S&P 500®. The firm continued its cautious optimism for 2026 and believes the current volatile environment presents significant investment opportunities. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, Matrix Asset Advisors highlighted NIKE, Inc. (NYSE:NKE). Headquartered in Beaverton, Oregon, NIKE, Inc. (NYSE:NKE) is a multinational company that designs, develops, and sells athletic and casual footwear, apparel, and equipment. On May 15, 2026, NIKE, Inc. (NYSE:NKE) closed at $41.88 per share. One-month return of NIKE, Inc. (NYSE:NKE) was -9.90%, and its shares lost 32.54% over the past 52 weeks. NIKE, Inc. (NYSE:NKE) has a market capitalization of $62.02 billion.

Matrix Asset Advisors stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q1 2026 investor letter:

"We also started a partial position in NIKE, Inc. (NYSE:NKE), a premier athletic shoe and sports apparel company. The company's share price has fallen sharply due to weak sales in China, a strategic misstep toward direct-to-consumer sales that has hurt long-standing relationships with wholesale partners, and competition from newer brands. After several years of poor results, the company brought in a new CEO in 2024 to repair its relationships with global retailers and restore its image as a sports-focused company. The company has cautioned that there are ongoing challenges from tariffs, consumers buying lower-cost alternatives, and high inventory levels. The stock is down more than 65% from its 2021 high of $179, as its earnings declined from $3.56 per share to an estimated $1.55 in the year ending 8/26. Our interest was piqued when we saw significant insider buying of stock at prices below $60. The stock has pulled back from our initial buys, and when cash is available, we expect to continue to slowly add to our position in the company. We believe the turnaround at Nike will take time, but the risk/reward at the current price is very attractive."