Current Price – $75.3 Target Price – $93.4 Growth Potential – 24.0%🔥 Dividend Yield – 2.0%💵 Investment Time – 1 Year
👟Nike is an American international company, one of the world leaders in the production of sportswear and footwear. The recent decline in the company's shares after the publication of the report created attractive conditions for purchase. The fair price of Nike shares is $93.4, the upside is 24%. Dividend yield is 2%.
Investment Theses
🔼Attractive valuation.
Nike presented a good report for the 4Q2024 financial year (which ended on May 31, 2024). Revenue fell by 2% y/y to $12.61 billion, while profit grew by 45.6% y/y to $1.5 billion ($0.99 per share). However, investors were frightened by the company's forecast, which assumes a 10% reduction in sales in the next quarter and by 4-6% by the end of the 2025 fiscal year. Nike shares fell by 20% against this background, which created attractive conditions for purchase. The company is now valued at only 24 expected annual profits, while the average estimate for 5 years was over 35 profits. Also, despite a number of negative revisions to the target price of shares, analysts see growth potential from current levels.
🔼Olympics as a growth driver.
Nike actively invested in the Paris Olympics. It is expected that it can give a new impetus to the growth of sales of the company's sports sneakers. In addition, Nike is conducting a cost reduction program, which will keep profits high.
🔽Risks.
The unfavorable economic situation in China and the United States may lead to a further decline in sales, which will negatively affect the company's securities.
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