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Bank of America: Sell Nike

Nike's reign as king of the athletic apparel industry may be coming to an end.

The stock, which is already down 19% year-to-date, fell more than 3% in Monday trading following Bank of America's call to sell the sportswear giant.

The firm downgraded the stock to underperform from neutral, and cut its price target on the stock to $46 from $55.

Nike Logo
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"This is a key downgrade, and it's a right one" -Jim Cramer, "Mad Money" host

Chief among Bank of America's concerns is Nike's falling market share. The firm believes Adidas and Under Armour will continue to chip away at Nike's customer-base, and that Nike isn't creating innovative products quickly enough.

Although the stock is the Dow's worst-performer this year and the Street is increasingly turning cautious on the athletic space more broadly, the Nike-believers remain.

The desk and "Mad Money" host Jim Cramer debated Bank of America's call, as well as which athletic stocks have room to run.

Last week when Under Armour CEO Kevin Plank joined the "Halftime Report" he spoke of consolidation in the industry and how companies will have to be creative and innovate in order to grow sales.


Jim Cramer agrees with the Bank of America call to sell Nike because of the increasing competition that Plank discussed.


Like Bank of America, Pete Najarian believes Nike's falling market share is a reason to hit the sidelines on the stock.

"They [Adidas] have come to North America, and they're going right after Nike...now Nike is starting to see it. As the market share starts to come down, people get more and more concerned."

Adidas store in New York
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Terranova also points to Adidas' rapid rise this year as a troubling sign for Nike's stock.

"Nike doesn't seem to have the near term momentum that Adidas does. The money has gone into Adidas so far year-to-date," he argued.

With shares of Adidas already up 66% this year, Terranova believes that if investors start to look for other opportunities in the space, they will choose Under Armour over Nike.

On the other hand, Jim Lebenthal believes Nike might soon be a buy. If the stock dips below $48 it's at the top of his buy list.

"You are getting a great world-beating brand at a good discount," he argued on the "Halftime Report."

Trader disclosure: On October 31, 2016 the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Halftime Report" were owned by the "Halftime Report" traders:

Jim Lebenthal: Long: AAPL, BA, C, CSCO, DCO, DIS, EEQ, GM, INTC, JCP, KMI,MPC, ORBC, PFE, QCOM, QRVO, SPLS, TIF, TRN, TWX, WGO

Joe Terranova: Long ADBE, ALB, BBT, DXY, FB, NOC, P, PSX, RF, SLB, SYK,TJX,TMO, TXN, USB, VRTS, VXX

Steve Weiss: Long: AAL, MENT, NBIX, OA, TMH Calls: NVDA

Pete Najarian: Long Stock: AAPL, BAC, DIS, DISCA, GE, KMI, KMI.A, KO, LUX,MRK, PEP, PFE CALLS: ABT, C, CNX, COP, CS, DISH, ECA, ETP, gm, GS, INTC,JBLU, JCP, KGC, LOW, MENT, MOS, MRVL, MT, MUR, NAV, NBR, PBR, RIO, SBUX,TTS, TV, TWTR, VRX, WFT, WLL, DVA. Puts: TWTR