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Analysis of the NIKE company #NKE

Analysis of the NIKE company #NKE

11 March 2021

NIKE is an American multinational company specializing in sportswear and footwear. For cost reasons, almost all Nike products are manufactured by third-party contractors outside the United States (mainly in Asian countries), and the company itself owns the trademarks and develops the design. According to the latest data, the company owns a network of more than 1000 stores, as well as NikeTown shopping centers. NIKE is currently the most expensive sports brand in the world.

#NKE’s main competitors are sportswear companies such as Under Armor, Adidas, Lululemon Athletica and Puma. However, among them, NIKE is the leader in terms of the number of stores and net profit, and is also more popular with consumers.

Q3 Revenue: $ 11.2B (+ 9% YoY)

Q3 Operating Income: $ 2.5B (+ 4% YoY)

Q3 net income: $ 1.3B (+ 12% YoY)

Earnings per share for the last quarter: $ 0.78, higher than the forecast of $ 0.62

The company quickly adapted to the new market conditions, which allowed it to increase its key financial indicators.

Geographic distribution of revenue:

North America – 40.76%

Europe, Middle East, Africa – 26.30%

Greater China – 18.79%

Asia Pacific & Latin America – 14.15%

Since 2013, NIKE has been included in the Dow Jones Industrial Average, which helps support the demand for the company’s securities from index funds. The company also pays dividends on a quarterly basis, but the forward dividend yield is only 0.8%, which is quite small even for the American market. Therefore, the company is unlikely to be a dividend; rather, it includes both good growth potential (entering new markets) and guaranteed cash flow in the form of dividends. However, looking at the current multiples, one can understand that the company is clearly overvalued by the market.

NKE looks good. Moderately growing trend. However, you should not buy right here, it is better to wait for the correction to the levels of 115 or even 105 and already with a larger one sit quietly to 160 or 150, respectively.

11 March 2021
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