2. Nike Inc. (NYSE:NKE)
Hedge Fund Holdings: 72
Headquartered in Beaverton, Oregon, Nike Inc. (NYSE:NKE) is an American multinational which specializes in the design, development and manufacture of footwear, apparel, equipment, accessories, and services. The company has an exquisite line of running shoes, yoga equipment, sports equipment, and gym equipment which facilitate weight loss and fitness. On October 3, Baird analyst Jonathan Kemp lowered the price target on Nike Inc. (NYSE:NKE) to $100 from $127 and kept an Outperform rating on the shares. The analyst stated that despite his attempts to model current macroeconomic pressures, the company reported a strong consumer demand, greater-than-anticipated inventory, and an impressive earnings outlook. Nike Inc. (NYSE:NKE) has also outlined actions needed to clear good plus incremental currency.
Investor interest in Nike Inc. (NYSE:NKE) increased in the second quarter of 2022, with 72 hedge funds having a collective stake value of $3.34 billion. This was up from Q1 2022, when only 67 hedge funds held stakes worth $3.98 billion in the stock. As of Q2 2022, Ayrshire Capital Management is the largest shareholder in Nike Inc. (NYSE:NKE), owning 24,876 shares worth $2.07 million. In Q2 2022, the company beat EPS estimates of $0.92 by $0.01, posting earnings of $0.93 per share. Furthermore, it was able to generate a total revenue of $12.69 billion in Q2 2022.
Here is what Madison Asset Management had to say about Nike Inc. (NYSE:NKE) in their Q2 2022 investor letter:
“NIKE, Inc. (NYSE:NKE) is the largest seller of athletic footwear and apparel in the world. Started from humble beginnings as Phil Knight’s “crazy idea” in a Stanford entrepreneurship class, Nike marked its 50th anniversary this year. By remaining true to its innovative culture, the brand is as strong as ever and continues to generate attractive growth, soon to surpass $50 billion in annual revenue. In addition to the continuous investments in brand innovation and marketing, over the last few years Nike has invested heavily to lay the foundation for multi-channel commerce. Today, Nike generates approximately 40% of its revenues through its online channel and branded storefronts. Empowered by CEO John Donahoe’s “Nike Consumer Direct Offense,” Nike’s ongoing investments are expected to further drive their overall revenue mix towards the direct-to-consumer channel which we estimate will result in substantial margin improvement over the next three to five years.
While Nike’s business in China, which accounts for approximately 20% of revenue, is experiencing challenges today, our due diligence suggests that consumer preference for the Nike brand outside the U.S. remains incredibly strong. Overall, we expect Nike’s broader ecosystem, often referred to as the Nike Marketplace, to continue to leverage the company’s innovation and premier brand to build direct consumer relationships which deepen Nike’s competitive moat and enhance its financial profile. Turbulence in the Chinese market and concerns over consumer spending in the US and Europe enabled us to initiate a position in Nike at an attractive discount to our appraisal of the company’s long-term value.”
