Nike has a ‘better risk-reward’ than the market, says Jim Cramer

CNBC’s Jim Cramer said on Tuesday that nike The stock is still more investable than Wall Street believed, even after a mixed quarter.

“I’m not going to tell you it was a good quarter. … But, and it’s a big one, but I don’t think the results were as bad as today’s 7% drop. [suggests],mad MoneyThe host said. “The long-term story remains intact,” he continued.

“I think downside risk is baked into the stock, and there isn’t any potential upside at all. That doesn’t mean Nike is screaming here. But I’m getting credit with some better risk-reward, and I’ll actually start a position tomorrow if it has to go down from here.”

Nike reports decline in earnings and revenue its fourth quarter, based on a survey of analysts by Refinitiv. The company said it expects first-quarter revenue to be flat or slightly up from a year ago, and forecast its full-year revenue to grow by low double digits.

The company is facing a number of problems, including supply chain disruptions, the Kovid lockdown in China, and wavering consumers in the US.

Overall sales in North America declined and Greater China suffered a major decline, which saw a 19% drop in overall sales compared to a year ago. CEO John Donahoe said in Nike’s earnings call that the company is “taking a medium to long-term view, and we are as confident today as we ever were.”

“At the moment, Nike’s biggest problem is China. But China’s comment was … faster than no,” Kramer said.

He said that while analysts cut price targets for Nike, the lower targets represent a change in the market that is bigger than the company.

“Last week, I told you that Total earnings estimates were too high and the market needed to come down before finding a stable bottom. That’s what it looks like,” he said.

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