NKE - Is Nike a Buy as Wall Street Analysts Look Optimistic? | Benzinga
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Nike (NYSE: NKE).
Nike currently has an average brokerage recommendation of 1.87, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 30 brokerage firms. An ABR of 1.87 approximates between Strong Buy and Buy.
Of the 30 recommendations that derive the current ABR, 17 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 56.7% and 6.7% of all recommendations.
Brokerage Recommendation Trends for NKE
While the ABR calls for buying Nike, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a ...