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Yahoo
02-07-2025
- Business
- Yahoo
Should You Buy the 2025 Dip in Nike Stock?
Nike's (NKE) performance over recent years has tested investor faith time and again. But on June 27, the narrative took a turn. After releasing its fiscal fourth-quarter earnings the day prior, NKE stock surged more than 15%, a clear sign that Wall Street heard something it liked. The stock had declined year-to-date (YTD) heading into earnings, but the latest results — backed by newly appointed CEO Elliott Hill's decisive tone — offered a sense of strategic clarity. Though revenue still declined from the previous year, both top- and bottom-line results came in stronger than feared. Microsoft Stock Is Headed for $4 Trillion. Is It Too Late to Buy MSFT Here? Is UnitedHealth Stock a Buy, Sell, or Hold for July 2025? Is Palantir Stock a Buy at New Record Highs? Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! With shares staging one of their best sessions this year, the report has reignited long-term curiosity. For a company that has long represented performance and endurance, Nike now finds itself at the starting blocks of what many hope will be the next great turnaround in retail. Nike commands a powerful presence as the world's top player in athletic footwear, apparel, equipment, and sports gear. With a market capitalization of $105 billion, it is built on a rock-solid brand foundation that includes Nike, Air Jordan, Nike Golf, and Nike Pro. Over the past 52 weeks, NKE stock has dropped 4.5%, a correction reflecting operational challenges and market headwinds. But in just five trading days, the stock has surged 20%, driven by the momentum sparked by the company's latest earnings results. NKE stock is now trading at 41 times forward adjusted earnings and 2.3 times sales. These valuations sit well above the industry average, reflecting the market's willingness to pay up for a potentially accelerating recovery. Adding to its long-term appeal, Nike pays an annualized forward dividend of $1.57, translating into a 2.21% yield. It has raised the dividend for 23 years in a row. The next payout, a $0.40 quarterly dividend, is scheduled for July 1 for shareholders who were on record as of June 2. Nike released its fiscal 2025 fourth-quarter results on June 26, offering numbers that, while far from flattering, managed to land ahead of Wall Street's expectations. Revenue for the quarter came in at $11.1 billion, a 12% decline from the same period last year yet still ahead of analyst forecasts calling for $10.7 billion. Within the results, the company's Nike Direct segment — its direct-to-consumer channel — posted a 14% drop in revenue, largely due to a sharp 26% fall in digital sales. Wholesale revenue declined 9%, and Converse took a 26% hit as well. Margins also faced pressure, with gross margin slipping to 40.3%, weighed down by heavier discounting and reduced full-price volume. Net income came in at $211 million, marking an 86% decline from the prior-year quarter. EPS also fell 86%, landing at $0.14. Despite the sharp contraction, the figure managed to top Wall Street expectations of $0.12. Nike closed the quarter with $7.5 billion in cash and equivalents, giving the company financial breathing room as it pivots its operating model. The brand is now focused on exiting deep discounting, cleaning out excess inventory, and revamping its product mix to restore pricing power and reassert premium status. Geographic diversification is another priority, with tariffs on Chinese imports threatening to drive $1 billion in added costs. Nike is moving its manufacturing footprint away from China to lower exposure and sharpen cost visibility. Looking ahead, analysts project Q1 2026 EPS to fall 61% year-over-year (YOY) to $0.27. For fiscal 2026, EPS is expected to decline 22% to $1.69. However, fiscal 2027 is projected to see a strong rebound, with EPS jumping 55% to $2.62. Wall Street's outlook on NKE stock is beginning to tilt in a positive direction, spurred by signs of a more disciplined turnaround. HSBC called out 'tangible evidence' of a rebound, upgrading its rating from 'Hold' to 'Buy' and raising the price target to $80 from $60. Truist shared a similar stance, maintaining a 'Buy' rating while lifting its price target from $73 to $85, suggesting that Nike's recent restructuring efforts are working faster than expected. NKE stock currently holds a 'Moderate Buy' consensus rating. Out of the 35 analysts covering the stock, 14 recommend a 'Strong Buy' rating, three rate it as a 'Moderate Buy," 16 suggest a 'Hold' rating, and two advise a 'Strong Sell.' The average price target of $75.99 represents potential upside of 3.5%. Meanwhile, the Street-High target of $120 suggests a potential climb of 63% from current levels. On the date of publication, Aanchal Sugandh 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. This article was originally published on
Globe and Mail
29-05-2025
- Business
- Globe and Mail
Nike Layoffs 2025: Is It Time to Sell NKE Stock as Nike Slashes Tech Jobs?
Nike (NKE) has initiated layoffs within its technology division as part of a strategic reprioritization. The company confirmed that a portion of this work will now be handled by third-party vendors, signaling a shift in its operational approach. The development follows the company's third-quarter fiscal 2025 earnings release in March, where Nike issued a softer-than-expected forecast for the fiscal fourth quarter. The market responded swiftly, with shares tumbling 5.5% the day after the announcement, reflecting investor concerns over the company's near-term trajectory. Adding to the caution, Nike has flagged the potential impact of tariffs as a headwind to recovery, amplifying doubts around the pace of its turnaround. Revenue pressures continue to weigh heavily, and the recent restructuring only reinforces the notion that Nike is tightening its belt to navigate a more challenging financial landscape. Against this backdrop, let us see if investors should remain patient with NKE stock or begin repositioning. About Nike Stock With a commanding market cap of $91.4 billion, the company boasts a robust brand lineup including Nike Pro, Nike Golf, and the iconic Air Jordan. Despite a 19% year-to-date decline due to market challenges, NKE remains resolute in its pursuit of growth. Its strategic pivot toward a 'Win Now' framework signals a renewed focus on brand strength and product innovation. The approach is already bearing fruit, with the stock rebounding 6.6% over the past month. On the valuation front, NKE currently trades at 29.2 times forward earnings and 1.81 times sales. While these metrics represent a premium over sector averages, they remain below the stock's five-year historical multiples, presenting a potentially attractive entry point. Nike Surpasses Q1 Earnings On March 20, Nike stepped into the earnings spotlight with its fiscal 2025 Q3 results, delivering a performance that, while bruised, managed to surpass market expectations. Revenues landed at $11.3 billion, reflecting a 9.3% year-over-year drop but edging past analysts' forecast of $11 billion. The dip, though significant, did little to shake investor confidence thanks to stronger-than-anticipated EPS of $0.54, down 30% yet nearly double the Street estimate of $0.28. A closer look under the hood revealed the shifting gears within the company. Nike Direct revenues came in at $4.7 billion, falling 12%, while Wholesale clocked $6.2 billion, down 7% from a year ago. Gross margin narrowed to 41.5%, a decline of 330 basis points. The slide stemmed from a mix of factors such as heavier discounts, greater inventory obsolescence reserves, rising product costs, and changes in the sales channel mix. Moreover, net income dropped 32.3% from the year-ago value to $794 million. At the same time, Nike is charting its return to Amazon (AMZN), reversing its 2019 decision to exit the platform in favor of direct sales. As of July 19, Amazon will begin phasing out certain third-party sellers to make room for Nike's official comeback. The maneuver aligns with CEO Elliott Hill's broader recovery blueprint, aimed squarely at leveraging North America, Nike's strongest market. Looking ahead, Nike believes the fiscal fourth quarter will bear the brunt of its 'Win Now' initiatives. It expects revenue to decline in the mid-teens, though toward the lower end of that range. As for EPS, analysts foresee an 89.1% year over year decline to $0.11 for Q4, and a 45.6% drop for the full fiscal year, closing at $2.15. While the path ahead seems rocky, Nike could weather the storm with strategy in stride. What Do Analysts Expect for Nike Stock? While challenges remain, NKE could experience a turnaround. Wall Street has painted a cautiously optimistic picture for NKE, stamping it with a 'Moderate Buy' consensus. Out of 36 analysts, 15 are all in, calling it a 'Strong Buy,' while three follow suit with a 'Moderate Buy.' Another 16 stay on the fence, holding firm with a neutral 'Hold,' and two raise red flags with a 'Strong Sell.' The average price target of $74.54 represents potential upside of 21%.
USA Today
18-02-2025
- Entertainment
- USA Today
Shop Nike shoes, jerseys and more inspired by basketball phenom A'ja Wilson
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