2 Stocks Down 44% and 30% to Buy Right Now and Hold for the Next Decade

Some of the best decade-long investments start as beaten-down brands that everyone has temporarily given up on. The trick is separating companies with a broken business from companies with a strong brand going through a rough patch.

Two consumer goods giants fit that second description right now. Nike (NYSE: NKE) has fallen about 44% from its high, and Estée Lauder (NYSE: EL) sits roughly 30% below its own recent peak. Both are messy today, and both look like the kind of names patient investors can be glad they own 10 years from now.

Image source: Getty Images.

Nike: A wounded champion rebuilding its footing

Nike is the most recognizable athletic brand on the planet, which is exactly why its stumble has been so jarring. The company spent years leaning too hard on its own apps and website while pulling back from the retail stores where most people actually shop, and demand suffered. CEO Elliott Hill, a Nike veteran who came out of retirement to fix it, has been rebuilding those wholesale relationships and refocusing on athletes and fresh product.

There are early signs that it is working. North America, Nike's largest market, has begun to grow again as store partners welcome the brand back onto their shelves.

The honest reality is that this turnaround is taking longer than management first hoped, with the bigger gains now expected in 2027 and beyond, and its once-reliable China business is still shrinking. But a decade is a long time. The brand itself, its marketing muscle, and its grip on sneaker culture have not disappeared, and the CEO has been buying shares with his own money, a signal he believes in the recovery.

For an investor with real patience, owning an icon while it is out of favor is often how the biggest gains are made.

Estée Lauder: A prestige beauty leader on the mend

Estée Lauder is the other side of the same coin, with a portfolio of premium beauty brands, including its namesake line, Clinique, MAC, and La Mer, that got knocked down hard. Its troubles came from a few directions at once: a slump in China, weakness in the travel-retail shops found in airports where it sells a lot of product, and thinner profit margins. Add tariffs to the mix, and the stock fell well off its highs.

Here again, though, the underlying business is showing signs of life. Recent quarterly revenue has grown and come in ahead of expectations, suggesting the recovery is slowly taking hold.

Over a 10-year horizon, the case rests on two durable trends: the global appetite for prestige beauty continues to expand, especially as more consumers in emerging markets trade up, and Estée Lauder owns some of the most coveted brands in the category. The risk is that the rebound stays bumpy, particularly if China takes longer to recover, so this is a stock to buy with the expectation of volatility along the way.

What should investors do?

Buying a stock that is down 40% or more takes a strong stomach, and neither of these turnarounds is guaranteed to be smooth. Nike still has to prove its comeback can accelerate, and Estée Lauder needs its key markets to heal. But that is precisely why the prices are attractive.

When you buy for a decade, you are betting on a brand's durability rather than next quarter's numbers, and both Nike and Estée Lauder are brands that tend to outlast their slumps. I would treat them as long-term positions to build patiently, reinvesting along the way, and give the businesses the years they need to mend. Ten years from now, today's pessimism may look like the opportunity it usually proves to be for great consumer brands.

Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.