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Can Nike (NKE) Stock Shrug Off Supply Chain Woes?

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It's the tail end of earnings season, but there are still some heavy-hitters on tap. Among them is athletic apparel maker Nike (NKE, $156.42), which is scheduled to tell all in the earnings confessional after the Sept. 23 close.

Investors would certainly welcome a positive reaction to NKE earnings, given the struggles the stock has seen over the past month. Since topping out at a record high near $174 in early August, Nike shares have shed more than 10%.

While some of the more recent sell-off could be due to broad-market headwinds – the Dow and S&P 500 are both down about 0.2% so far in September – Wall Street appears to be a bit concerned over COVID-related global supply chain issues, particularly after Nike was forced to shutter factories in Vietnam in July because of the pandemic.

These factories accounted for roughly 51% of NKE's total production capacity in Asia ahead of the shutdown. "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," BTIG analyst Camilo Lyon wrote in a note. He recently downgraded the stock to Neutral (Hold) from Buy.

These months-long Vietnamese production........

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