This is time to invest in Nike Stock:
Nike’s (NKE) stocks rose by 3.4% after Bank of America Securities upgraded its rating on the stock from “neutral” to “buy.” The upgrade was based on optimism that Nike’s earnings estimates for fiscal year 2025 are now more achievable. Bank of America raised its price target for Nike to $113 from $110.
Current Market report of Nike:
- Company: NIKE, Inc. (NKE)
- Stock Exchange: New York Stock Exchange (NYSE)
- Current Stock Price: $88.98 per share
- 52-Week Price Range: $88.66 to $128.68
- Market Capitalization (Market Cap): Approximately $134.85 billion
- Price-to-Earnings Ratio (P/E): 26.18
- Earnings Per Share (EPS): $3.40
- Forward Dividend Yield: 1.57%
Comparison of Nike, Adidas AG, Under Armour
| Company | Nike Inc. (NKE) | Adidas AG (ADDYY) | Under Armour Inc. (UAA) |
| Stock Price | $88.98 | $140.00 | $22.25 |
| Market Cap | $134.85B | $54.6B | $10.6B |
| 1-Year Total Returns | 22.3% | -16.5% | 31.6% |
| P/E Ratio | 43.91 | 27.81 | 23.71 |
Adidas AG (ADDYY):
- 2022 Financial Year:
- Operating profit decreased by 12% to €794 million (approximately $934 million) in the three months to September.
- Sales during this period amounted to €5.96 billion (approximately $7.01 billion).
Under Armour (UAA):
- Q4 2021 Earnings:
- Net income was $109.7 million, or 23 cents a share, compared with $184.5 million, or 40 cents a share, in the previous year.
- Excluding one-time items, Under Armour earned 14 cents a share, surpassing analysts’ estimates.
- Revenue grew to $1.53 billion from $1.4 billion in the previous year.
- 2021 Annual Forecast:
- Adjusted earnings per share were forecasted to reach about 74 cents, compared with the previous range of 50 cents to 52 cents.
- Revenue was expected to increase by about 25%.
Key Observations:
- NKE has demonstrated consistent growth over the past year, delivering positive returns.
- Adidas faced challenges following the termination of its partnership with Kanye West due to controversial remarks, potentially impacting its net income.
- Under Armour underwent executive transitions but achieved strong returns.
Current Bank Of America Upgrade :
(NKE) shares rose by 3.4% after Bank of America Securities upgraded its rating on the stock from “neutral” to “buy.” The upgrade was based on optimism that Nike’s earnings estimates for fiscal year 2025 are now more achievable. Bank of America raised its price target for (NKE) to $113 from $110.
Analyst Lorraine Hutchinson noted that consensus estimates for NKE’s fiscal year 2025 earnings per share (EPS) have dropped significantly over the past two years but are now stabilizing. She highlighted Nike’s efforts to transform and mentioned that the stock is currently at a “10-year trough” relative to its price-to-earnings (P/E) ratio.
Hutchinson pointed out upcoming catalysts for NKE, including the company’s first Investor Day in seven years and the Summer Olympic Games in Paris, which historically benefit Nike due to newness and marketing opportunities. She also mentioned NKE’s management recognizing the need for significant changes and the potential for faster sales stabilization through the recently announced cost savings plan.
Despite the positive news, Nike shares have experienced a decline of about 25% over the past year.
NIKE, Inc.’s fiscal 2023 fourth quarter and full year results:
Full-Year Revenues: Reported revenues were $51.2 billion, marking a 10% increase compared to the previous year and a 16% increase on a currency-neutral basis.
Fourth Quarter Revenues: Reported revenues were $12.8 billion, showing a 5% increase compared to the prior year and an 8% increase on a currency-neutral basis.
NIKE Direct Revenues: Fourth-quarter revenues from NIKE Direct were $5.5 billion, up 15% year-over-year and up 18% on a currency-neutral basis.
Wholesale Revenues: Fourth-quarter wholesale revenues were $6.7 billion, down 2% compared to the previous year but up 2% on a currency-neutral basis.
Gross Margin: Gross margin for the fourth quarter decreased to 43.6%, attributed to higher product input costs, elevated freight and logistics costs, and other factors.
- Diluted Earnings Per Share (EPS): Diluted earnings per share for the fourth quarter were $0.66.
- CEO’s Statement: CEO John Donahoe highlighted the success of their strategy and the ongoing focus on innovation and digital leadership.
- CFO’s Statement: CFO Matthew Friend emphasized the strength of NIKE’s portfolio for driving growth and laying the groundwork for sustainable, profitable growth in fiscal year 2024 and beyond.
Bottom line:
NIKE demonstrated strong growth, Adidas faced challenges in the North American region, and Under Armour reported improved earnings. Investors should closely monitor these companies’ financial performance and market dynamics.