NKE, PLTR, or UBER: Which Large-Cap Stock Is the Best Pick?

Wesley ParkWednesday, Dec 18, 2024 4:41 pm ET
4min read


In the dynamic world of large-cap stocks, investors often seek opportunities in companies with proven track records and established business models. Using TipRanks' Stock Comparison Tool, we've analyzed Nike (NKE), Palantir (PLTR), and Uber (UBER) to determine which large-cap stock is the best pick, according to Wall Street analysts.

Nike (NKE)
Shares of athletic footwear and apparel giant Nike have declined nearly 29% year-to-date, reflecting investor concerns about rising competition, lack of innovation, and macroeconomic pressures. The company recently reported mixed Q1 FY25 results and withdrew its full-year guidance, disappointing investors. Under new CEO Elliott Hill, Nike aims to revitalize its business by enhancing product assortment and refocusing on innovation. However, these initiatives may take time to drive improved financials.

Analysts expect Nike's Q2 FY25 revenue to decline by 8% to 10% and its gross margin to contract by 150 basis points due to higher promotions, an unfavorable channel mix, and supply chain de-leveraging. The company's EPS is projected to fall by approximately 38% to $0.64, with revenue expected to drop more than 9% to $12.12 billion.

Citi analyst Paul Lejuez reiterated a Buy rating on NKE with a $102 price target, expecting an EPS of $0.58 in Q2, which is lower than the consensus estimate. Lejuez anticipates commentary from the new CEO on inventory positioning and the company's strategy to return to revenue growth amid ongoing uncertainties.

Palantir (PLTR)
Palantir's stock has experienced a rally that fizzled as the technology and artificial intelligence leader joined a broad market retreat. The company recently expanded its partnership with the U.S. Army, securing a $618.9 million contract to continue supporting the Army Data Platform strategy and joint multi-domain operations through 2028.

However, Palantir faces risks related to its dependence on government contracts and the potential for reduced spending on technology and AI initiatives. Additionally, the company's high valuation and rapid growth may make it vulnerable to market fluctuations and investor sentiment.

Uber (UBER)
Ride-hailing and food delivery giant Uber has faced challenges in recent years, including regulatory pressures, competition, and a shift in consumer behavior. The company has been focusing on its core ride-hailing business and expanding its food delivery operations, including the acquisition of Postmates and the integration of its Eats platform with Didi's food delivery service in China.

Uber's key risks include regulatory hurdles, competition from established and new players, and the potential for economic downturns to impact demand for its services. The company's valuation may also be affected by investor concerns about its ability to achieve sustainable profitability and growth.

In conclusion, Nike, Palantir, and Uber each face unique risks and challenges that impact their respective valuations. Nike's struggles with competition and innovation, Palantir's dependence on government contracts, and Uber's regulatory hurdles and competition are all factors investors should consider when evaluating these large-cap stocks. While Wall Street analysts have a Moderate Buy consensus rating on Nike, investors should weigh the risks and challenges faced by each company before making a decision.