Nike’s Potential Dow Jones Departure in 12 Months: Who Will Take Its Place?

Key Points

• Verizon was removed from the Dow Jones Industrial Average, while Alphabet was added, marking the 54th change since the index’s inception in 1896.

• Nike faces potential removal due to low share price and operational challenges; its shares have dipped below $40, making it the lowest-priced stock in the index.

• Possible replacements include Tesla or Airbnb, with share prices of $420.60 and $143.10, respectively; both companies could enhance the Dow’s representation of consumer spending and energy sectors.

S&P Dow Jones Indices announced earlier this week the removal of Verizon Communications and the addition of Google parent Alphabet to the Dow Jones Industrial Average. This marks a significant shift in the index that has occurred 54 times since its establishment in May 1896.

Nike is at risk of being dropped from the Dow within the next year due to its declining operational performance and share price, which has recently fallen below $40 — the lowest of any Dow component. In light of Nike’s struggles, potential replacements being considered include Tesla and Airbnb, both of which have higher share prices and could bring valuable consumer and energy sector representation to the index.