When a Turnaround Laces Up, You Don’t Want to Miss the First Stride

Earnings beats don’t erase bruises overnight, but they do show progress.

Today’s lineup covers a sportswear brand clawing back, big pharma juggling politics, fintech finding its groove, and a social app still fighting for its spot on your screen.

Let’s lace them up.

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Nike | NKE

Price: $74.20

Nike (NYSE: NKE) gave investors a small win this quarter, as revenue actually grew 1% instead of shrinking.

Wholesale and North America carried the load, but direct-to-consumer and China slumped, with overall profits falling 31%.

Gross margin slipped, too, as the company used discounting to clear old sneakers off the shelves. It’s the definition of a messy turnaround with progress in spots, but pain elsewhere.

The strategy under CEO Elliott Hill is simple but not quick: clean up inventory, refocus on sports, and push innovation again.

A relaunch into running and partnerships like Nike x Skims show signs of momentum, but it takes time to reset consumer perception.

Clearing inventory eats into margins now, but eventually makes space for fresh, higher-margin product.

Game plan: accumulate on dips, especially if gross margin stabilizes. Track North America strength versus China softness, plus wholesale channel momentum.

This stock is more marathon than sprint.

Why it matters to you: Nike still has brand gravity and dividend ballast.

Turnarounds aren’t straight lines, but if execution sticks, the payoff could be big when the sneaker cycle resets.

Pfizer | PFE

Price: $27.21

Pfizer’s (NYSE: PFE) deal with Washington shook headlines but steadied the stock.

It agreed to price concessions in exchange for tariff relief and a direct-to-consumer sales portal (“TrumpRx”).

Investors feared crushed margins, but Pfizer’s strong cash flow and 74% gross margin cushion the blow.

More importantly, it bought time and predictability in a messy pricing environment.

On top of that, Pfizer is investing $70 billion into U.S. manufacturing and R&D, which plays well politically and sets up pipeline leverage.

The dividend yield near 7% is no accident, as Pfizer wants to keep income investors on board while it rebuilds growth.

The obesity-drug angle from the Metsera acquisition is another wildcard: if trial results hold, it could reframe Pfizer beyond vaccines and legacy drugs.

Game plan: accumulate if you want steady income and optional upside. Track obesity drug data, tariff policies, and cash flow coverage of the dividend.

Why it matters to you: Pfizer’s income profile plus pipeline optionality means you’re not just holding a coupon clipper, you’re holding a stock that could regain growth narrative if just one pipeline bet pays off.

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Merck | MRK

Price: $90.13

For Merck (NYSE: MRK), the looming overhang is Keytruda’s patent clock, but the story is bigger than that.

The company just posted late-stage wins in respiratory disease and oncology, inked licensing deals to expand its vaccine pipeline, and continues to diversify revenue streams.

Merck’s dividend yield near 4% makes it easier to wait for the pipeline to deliver.

The bigger industry backdrop is Trump’s drug-pricing push.

The PhRMA consortium, with Merck among the leaders, pledged $500 billion in U.S. investments to soften the blow of mandated price cuts.

It’s a defensive move, but it highlights Merck’s financial strength. Pair that with steady cash flow, and you get a name that can weather policy storms.

Game plan: treat Merck as a buy-on-worry stock. If Keytruda noise drives dips into the low $80s, accumulate.

Watch WINREVAIR adoption, RSV antibody approvals, and KEYTRUDA’s new delivery routes.

Why it matters to you: Merck’s not the flashiest pharma, but it’s a proven operator with cash to fund its next act.

Policy headwinds may keep it cheap, which is often the right time to step in.

Block | XYZ

Price: $73.40

Block (NYSE: XYZ), better known for its Square POS system and Cash App, is staging a comeback.

Merchant volumes are improving, particularly with big-ticket clients, and Square is regaining market share by improving its tech and pricing transparency.

Cash App continues to hum with sticky growth in peer-to-peer payments and adjacent products like investing and Bitcoin.

Analysts are noticing. Mizuho recently bumped targets, calling Square “the comeback kid.” Investors who wrote Block off in 2022–23 are now rethinking the story.

The problem is that fintech names still trade with volatility, and Block’s profitability hasn’t been as consistent as peers. The growth is real, but the margin math needs to catch up.

Game plan: start small and watch operating leverage.

Add if gross profit per merchant continues to rise and Cash App monetization expands. Expect choppiness; this isn’t a set-and-forget.

Why it matters to you: fintech cycles come and go, but few firms have a two-sided network like Block. If it sustains execution, this is a turnaround that can quietly compound.

Snap | SNAP

Price: $7.71

Snap (NYSE: SNAP) has lived in the penalty box, with weak ad pricing, churn in North America, and a stock down more than 30% YTD.

But underneath the frustration, there’s progress. Subscriptions (Snap+) are scaling, Spotlight (its TikTok clone) is now nearly half of user watch time, and AR investment remains a long-game differentiator.

The valuation reflects zero faith, trading at just 2x forward sales, the lowest multiple in its history.

That creates asymmetry: if execution improves even slightly, the stock rerates fast. If not, the market has already punished it.

Optionality is also in play as takeover chatter lingers, and Snap’s grip on younger users is a rare asset competitors would love.

Game plan: size it like a speculative bet. Define risk below $7, add only if DAUs stabilize and revenue per user improves. Ignore buyout rumors and focus on operating metrics.

Why it matters to you: Snap is all about risk/reward. If management steadies execution, upside is sharp. If not, you kept it small and controlled.

This basket gives you balance. Nike showing signs of a turnaround, Pfizer buying time with yield and pipeline, Merck fighting policy while delivering science, Block climbing back in fintech, and Snap still fighting for relevance with big upside optionality.

Mix of defensive yield and speculative torque, the kind of lineup that keeps a portfolio resilient but still interesting.

Stat of the Day: 2.9%
The Fed’s preferred inflation gauge (Core PCE) hit 2.9% in August, the highest since February and still above target. Don’t expect the Fed to relax too fast.

Inflation sticking higher means you want dividend payers with pricing power, plus selective growth names that can weather higher-for-longer.