The Nike share price has not been immune to the broad-based weakness across equity markets, with the company’s stock down 43% YTD.
Despite that, as we discuss below – the stock is currently undervalued – if you put much weight in Wall Street’s opinions.
Nike Overview
Founded in 1964 – Nike has come to be known for its innovative designs, backing some of the world’s best athletes, and impressive revenue growth & scale over the last two decades.
That revenue growth in part likely explains the persistent bullishness from Wall Street analysts. Nike’s annual revenue has run from US$13.7 billion in FY05 all the way up to US$46.7 billion in FY22.
More broadly and despite the global headwinds we are seeing – checkout what happens to stocks during recessions – the sportswear company has continued to power forward in calendar 2022. Here’s a quick take of Nike’s most recent earnings for the first quarter of FY23:
- Revenue increased 4% to US$12.7 billion
- Digital sales rose 16%
- Gross margins declined 220 basis points to 44.3%
- Earnings per share fell 20% to $0.93
- Inventories rose 44% in the period, hitting US$9.7 billion
Fun fact: Did you know that the brand value of Nike stood at US$33.1 billion in 2022, according to Statista.
Nike Share Price Outlook
Analysts currently have a Buy rating on Nike, on average. Of the sell side analysts covering the stock, Nike has 17 Buy ratings, 6 Overweight ratings, and 12 hold ratings.
Not only that, but the average analyst price target on Nike implies that Wall Street expects the stock to potentially rise 18.2% from where it closed at on November 7, 2022.
Some key investment banks see even more upside than that. New research from UBS recently set a US$141.00 price target on Nike, while JPMorgan set their price target to US$120.00.
The lowest analyst price target on Nike is US$83.00.
How to buy and invest in US shares
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This article/webinar is brought to you by Syfe Australia Pty Ltd., CAR number 1295306 of Sanlam Private Wealth Pty Ltd (AFSL 337927). Disclaimer: Investing involves risk including the risk of losing your invested amount. We do not provide personalised advice or recommendations. Any information we provide is general advice and current at the time written. Please speak to your Financial or Tax adviser for personal advice. Any reference to an investment’s past or potential performance is not an indication of any specific outcome or profit.
