2. NIKE, Inc. (NYSE:NKE)
Stock Price as of March 25: $66.5
52-week Low: $65.1
Number of Hedge Fund Holders: 73
NIKE, Inc. (NYSE:NKE) is engaged in the designing, developing, marketing, and selling of athletic footwear, apparel, equipment, accessories, and services. Jefferies analyst Randal Konik reaffirmed a “Buy” rating on the company’s stock with a steady price objective of $115.00. The analyst showcased the positive signs from NIKE, Inc. (NYSE:NKE)’s latest product roll-outs and its progress in reducing the excess inventory. Furthermore, the analyst mentioned the swift restoration of the company’s relationships with wholesale partners. Overall, the price objective demonstrates a consistent view of the company’s value and growth potential despite the current market conditions.
Elsewhere, Alison Fok from DBS maintained a “Buy” rating on the company’s stock with a price objective of $115.00. The rating is backed by factors indicating growth potential and strategic improvements for NIKE, Inc. (NYSE:NKE). One of the critical reasons revolves around the launch of the NikeSKIMS line, which is a partnership with Kim Kardashian targeting the women’s fitness and activewear market. Furthermore, the company continues to take steps to revitalize its product offerings and marketing strategies. NIKE, Inc. (NYSE:NKE) remains focused on refreshing the footwear lineup and managing expenses in a bid to maximize consumer impact.
RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its Q4 2024 investor letter. Here is what the fund said:
“NIKE, Inc. (NYSE:NKE): NKE shares were a top detractor in the quarter following better than expected fiscal second quarter results reported in December but worse than feared third quarter guidance. The company delivered $13.4 billion of revenue (roughly $1 billion better than expectations) and $1.9 billion of EBIT (roughly $500 million ahead of street consensus) and generated better than expected earnings of $1.03 (investors were looking for $0.78). Despite better operating metrics last quarter, the company dramatically lowered expectations for the fiscal third quarter including expectations for double-digit percentage declines in revenue. NKE’s new CEO, Elliot Hill, described several key issues negatively impacting the company’s growth trajectory including 1) a multi-year move away from a focus on sports, 2) a shift away from innovative demand creating marketing, 3) too much centralization, which has led to lack of execution capabilities in local markets, and 4) too much focus on Nike Digital, which negatively impacted the brands standing in the marketplace.
Nike is, by far, the leading athletic footwear, apparel, and equipment company in the world with over $50 billion in revenue, $6.7 billion in FY2024 annual free cash flow, and $10 billion of excess cash. We believe that over the long term, the global secular growth trend towards active wear will continue to aid Nike’s top-line growth driving gross and operating margin improvements and long-term mid-teens or higher annual EPS growth. In the short term, we believe that the company will work through the above headwinds and that revenue and earnings growth will reaccelerate in the next 12 months.”
