Why this CIO is sounding the alarm on two key consumer bellwether stocks
Even as valuations for both Nike and FedEx stock come down to a more attractive level, both stocks are still a sell, according to Main Street Research chief investment officer James Demmert. Shares of FedEx have pulled back more than 18% in 2025, while Nike’s stock has slipped about 10%. On Thursday, FedEx slashed its full-year forecast , citing macroeconomic uncertainty, while Nike executives said they expect headwinds in the current quarter as consumer sentiment weakens amid talk of tariffs on a range of consumer goods. Here’s what Demmert had to say on CNBC’s “Power Lunch” on Friday. FedEx FedEx shares ended Friday down 6.5%, after hitting a fresh 52-week low. “Even at 14 times earnings, I don’t think this is a healthy choice for lunch,” Demmert said. Instead, he said he preferred to be an owner of Parker-Hannifin or Hitachi , which he said benefits from being more diversified. He noted that this latest quarter was the third time in a row that the shipping company has slashed its profit outlook and missed revenue estimates. That trend has pushed him to a sell rating on the stock. FDX YTD mountain FedEx stock in 2025. That said, most analysts still have a buy or strong buy on FedEx shares, according to LSEG. The average price target is $310.72, which suggests shares could rise more than 34%. Nike Demmert also had little conviction for Nike, questioning its ability to compete with trendier brands such as Hoka. He said a better choice in the consumer discretionary sector is Booking Holdings or Netflix . NKE YTD mountain Nike stock in 2025. “Even at 13 times earnings,” he said, “we’d still be a seller” of Nike stock. Nike is being hurt by souring consumer sentiment and the threat of a trade war, which could make its products more expensive. The company is in the early days of a turnaround, but with performance worsening as the fiscal fourth quarter progressed, it seems as though it will take a while for those efforts to gain traction. With Friday’s 5% drop, Nike shares have fallen more than 33% over the past 12 months. Cleveland-Cliffs Elsewhere, Demmert called Cleveland-Cliffs “another disastrous stock” after it reported declining sales and weak results in its latest quarter. Shares are roughly flat year to date, but have pulled back more than 13% so far in March. CLF YTD mountain Cleveland-Cliffs stock in 2025. Demmert said he preferred industrial gas company Linde among materials stocks. He said he is cautious on Cleveland-Cliffs because of President Donald Trump’s tariffs, even though the company is a U.S. steel producer. Demmert said he prefers greater exposure to overseas markets. “We think we have put in a bottom in the U.S. market, but we think the valuations in Europe are just too appealing to ignore,” he said. His comments come as the S & P 500 eked out a gain heading into the market’s close on Friday, averting a fifth straight week of losses.
