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Beaverton, Oregon-based NIKE, Inc. (NKE) is renowned for its innovative designs in shoes and sports equipment. The company develops, markets, and sells athletic footwear, apparel, equipment, accessories, and services. With a market cap of $135 billion, NIKE’s operations span over 190 countries across the Americas, Europe, Indo-Pacific, Africa, and internationally. It is expected to release its Q1 earnings after the market closes on Tuesday, Oct. 1.
Ahead of the event, analysts expect NIKE to report a profit of $0.51 per share, down 45.7% from $0.94 per share reported in the year-ago quarter. However, the company has consistently surpassed the consensus estimates in each of the past four quarters. Its EPS for the last reported quarter grew by a staggering 53% year-over-year to $1.01, exceeding the EPS projections by 18.8%.
Looking ahead to fiscal 2025, analysts expect NIKE to report an EPS of $3.02, down 23.5% from $3.95 in fiscal 2024. Nevertheless, in 2026, its EPS is estimated to grow 13.6% annually to $3.43.
NKE is down 17.6% in 2024, substantially lagging behind the S&P 500 Index’s ($SPX) 20.3% gains and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 12.3% returns on a YTD basis.
Shares of NIKE plummeted nearly 20% after the release of its fiscal 2024 earnings on June 27. Despite reporting an impressive 45.5% year-over-year increase in net income, the company’s revenues fell by 1.7% to $12.6 billion, missing Wall Street’s expectations.
Initially, NIKE’s strategic shift toward a direct-to-consumer model and reduction in wholesale distribution yielded positive results, particularly during the COVID-19 pandemic and the subsequent year. However, the company is now encountering challenges that have necessitated a strategic pivot back to reestablishing wholesale partnerships and expanding its retail presence. Despite the sharp fall in share prices in 2024, investors have recently shown confidence in NIKE, leading to a 4.9% surge in share price over the past month.
The consensus opinion on NKE stock is moderately bullish, with an overall “Moderate Buy” rating. Among the 31 analysts covering the stock, 14 recommend “Strong Buy,” 15 suggest “Hold,” and two give a “Strong Sell” rating.
The mean price target of $91.31 suggests a potential upside of 2.1% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
