What Mark Parker's Departure And John Donahoe's Arrival Means For Nike, ServiceNow

The footwear industry is undergoing a massive executive shakeup.

It began Monday when Adidas AG (ADR) ADDYY CMO Eric Liedtke announced he was stepping down. Liedtke was largely responsible for Adidas’ resurgence in North America and was presumably the company’s next pick for CEO.

On Tuesday, more bombshells were dropped when Under Armour Inc UAA CEO and Founder Kevin Plank announced he was resigning, followed by Nike Inc NKE CEO Mark Parker resignation just a few hours later.

The timing of these announcements — even if some were just a matter of time — raises the question: is there something the executives know that the public does not?

What It Means For Nike

Incoming Nike CEO John Donahoe, the current CEO of ServiceNow Inc NOW, has some big shoes to fill at a time when the company is leading consumer industry innovation and shares are at all-time highs, Wedbush analyst Christopher Svezia said.

“Known as an innovator and having led three other successful companies as CEO, Mr. Donahoe also brings to Nike a digital background and years of experience on its board and in working with other Nike executives, including in strategic planning and also developing Nike’s digital capabilities, a key driver and advantage of the company,” the analyst wrote in a note.

Donahoe appears to be a formidable choice to lead Nike into the future and continue its market dominance, he said. Wedbush maintained an Outperform rating on Nike with a $100 price target.

Morgan Stanley analyst Kimberly Greenberger said she views the change as encouraging and expects a seamless CEO transition.

“Though the timing is unexpected, we view Donahoe as an exceptional candidate for the job given his extensive digital background, which is particularly relevant as Nike strategically pivots towards digital initiatives,” the analyst wrote in a note.

Morgan Stanley doesn't expect the CEO transition to alter near-term results, Greenberger said, adding that it may accelerate Nike’s digital transformation initiatives ahead of forecasts.

Morgan Stanley maintained an Overweight rating on Nike with a $108 price target.

What It Means For ServiceNow

Incoming ServiceNow CEO Bill McDermott brings decades of leadership, strong software chops and key strengths in enterprise sales, Morgan Stanley analyst Keith Weiss said.

McDermott, the longtime SAP SE SAP CEO, brings several strengths to the table that make him a solid fit for ServiceNow, the analyst said, including decades of executive leadership in the software sector, strong relationships with large enterprise customers and a strong reputation for building world-class enterprise sales teams.

Morgan Stanley maintained an Equal-Weight rating on ServiceNow with a $267 price target.

Mizuho analyst Gregg Moskowitz downgraded ServiceNow from Buy to Neutral on the news. Employee attrition at the company has become a concern, and Donahoe's departure could accelerate this trend, the analyst said.

Moskowitz lowered the price target from $308 to $230.

Price Action

Nike shares were down 2.9% at $92.83 at time of publication, while ServiceNow shares were down 5.19% at $216.50.

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Photo courtesy of Nike.