Nike Inc ($NKE) Cautious Buy or Hold to $67 Confident Investor Rating: Fair

Company name Nike Inc
Stock ticker NKE
Live stock price [stckqut]NKE[/stckqut]
P/E compared to competitors Good


Employee productivity Good
Sales growth Poor
EPS growth Fair
P/E growth Poor
EBIT growth Fair


Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $65.65
Target stock price (averages with growth) $77.19
Target stock price (averages with no growth) $60.66
Target stock price (manual assumptions) $68.79

The following company description is from Google Finance:

NIKE, Inc. (NIKE) is engaged in the design, development and worldwide marketing and selling of footwear, apparel, equipment, accessories and services. NIKE is a seller of athletic footwear and athletic apparel worldwide. The Company sells its products to retail accounts, through NIKE-owned retail stores and Internet sales, and through a mix of independent distributors and licensees, in approximately 190 countries around the world. The Company focuses its product offerings in seven key categories: Running, Basketball, Football (Soccer), Men’s Training, Women’s Training, NIKE Sportswear (its sports-inspired products) and Action Sports. It also markets products designed for kids, as well as for other athletic and recreational uses, such as baseball, cricket, golf, lacrosse, outdoor activities, football (American), tennis, volleyball, walking and wrestling. In February 2013, it sold its Cole Haan affiliate brand to APAX Partners LLP.


Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in this stock as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
[s2If current_user_can(s2member_level1)]
In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

Stock price at the time of the calculation: $66.82

Growth: 0.105

Current EPS (TTM): $2.69

P/E: 25

Future EPS Calc: $4.43

Future Stock Price Calc: $110.79

Target stock price: $68.79

I hope that this makes you a better investor. [/s2If]


  1. Nike’s stock has outperformed both the S&P 500 Apparel and Accessories Index and the Consumer Discretionary ETF (XLY) by 47% and 40% respectively over the last five years period ending October 2013, following overall growth in the demand for footwear in the US. It has also outperformed Adidas by 65% over the five years and 13% on a year to date basis.

  2. Author

    Adam –

    Your analysis is valid. I just think their overall growth is a bit lower than it should be for me to qualify the company as a Good company. Sales YoY growth has been quite inconsistent as has EPS YoY growth. This makes the investment a bit more risky than some of the other companies that make my Watch List. While I have no real concerns about the company, I feel there are other companies that have a bit better YoY performance and therefore I can be more CONFIDENT of future performance.

    An investment in Nike wouldn’t be a terrible idea as long as the investor watched the performance closely and balanced the investment with other companies that have a more reliable growth trajectory.

  3. Nike, Inc. (NKE) is the 30th most popular global brand according to the Global 500 2012 list released by Brand Directory. The company designs, develops and markets athletic footwear and apparel, sports equipment, accessories and services. Its major markets include North America, Western Europe, emerging markets and Greater China, which together contribute over 81% of Nike’s total revenues. North America alone contributes around 41% of Nike’s total revenues.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.