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Analysis of Nike Inc.

Analysis of Nike Inc.

5 October 2022

Nike: keeping our finger on the pulse

Nike is a multinational company originally from the USA. It specializes in sportswear, shoes and accessories. The company owns the rights to trademarks, develops designs and owns a developed network of retail stores. The bulk of Nike products are manufactured outside the country.

Nike reported the other day effectively – revenue growth of 4% in the third quarter. Revenue parameters, like EPS, were better than expected. Net income per share was $0.93 versus the forecast of $0.92.

Nike’s strong positions:

  • bid on direct sales and digital sales channels;
  • wide product offer, progressive design, customer loyalty;
  • following trends;
  • improvement of delivery parameters.

Risks:

  • the strengthening of the dollar has a negative impact on the company’s results;
  • increase in the cost of production;
  • reduction of gross margin due to a sharp increase in freight costs and logistics prices;
  • a large volume of stocks of goods in warehouses in North America;
  • increased administrative costs due to inflation and spending on the development of sales channels.

Accumulated goods in warehouses may complicate sales of new Nike collections, but this is a temporary phenomenon. The stabilization of the economy after the recession will even out consumer demand for clothing and shoes, and Nike will be able to expand the pool of loyal customers.

However, while the market-wide minor is pulling Nike shares down, the time to buy has not come yet, but it is worth carefully monitoring the development of the situation.

The consensus forecast for the paper is $110-115.

The MACD indicator on the daily chart falls in the negative area and signals a sale. The Stochastic oscillator starts to grow in the negative area and forms a buy signal.

5 October 2022
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