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Based in Beaverton, Oregon, NIKE, Inc. (NKE) is a global leader in the athletic footwear, apparel, and equipment industry. With a market cap of $145.73 billion, NIKE is one of the most valuable companies in the retail sector. Competing fiercely with other sportswear giants, NIKE's main rivals include Adidas AG (ADDYY), renowned for its innovative designs and strong presence in the global market.
Companies worth $10 billion or more are generally considered "large-cap" stocks, and NIKE exemplifies this category, implying its significant size, stability, and dominance in the athletic apparel and footwear industry. The company has reinforced its market leadership and driven growth through innovation, strategic acquisitions, and robust product development, ensuring its resilience in a competitive landscape.
NKE shares are trading 21.8% below their 52-week high of $123.39, which they hit on Dec. 20, 2023. NKE has seen a 2.7% decline over the last three months compared to the 1.4% decline seen in the Consumer Discretionary Select Sector SPDR Fund (XLY) during the same period.
Over the longer term, NKE shares have declined 11.2% YTD and 8.9% over the past 52 weeks. In comparison, the XLY has seen a slight decrease in 2024 and an increase of 10.3% over the past year.
To confirm the bearish price trend, NKE has been trading below its 200-day moving average since mid-February.
NKE's recent outperformance can be attributed to its better-than-expected Q3 results released on Mar. 21. While the stock saw a marginal gain on the announcement day, it experienced a downtrend since then. The company reported fiscal third-quarter earnings of $1.17 billion, translating to a profit of 77 cents per share. Adjusted for restructuring costs, earnings were 98 cents per share, exceeding Wall Street expectations of 69 cents per share. Additionally, the company posted revenue of $12.43 billion, surpassing the analysts' forecast of $12.28 billion.
Highlighting the contrast in performance, NKE's competitor, Adidas, has significantly outperformed NKE and the Consumer Cyclical sector with a gain of 46.4% over the last 52 weeks.
Analysts are moderately optimistic about NKE's prospects despite the weak price performance. The stock has a consensus rating of "Moderate Buy" from 29 analysts in coverage. The mean price target of $114.10 reflects an 18.3% premium over current levels.
On the date of publication, Rashmi Kumari 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.
