Stock (Symbol) |
Nike (NKE) |
Stock Price |
$53 |
Sector |
| Retail & Travel |
Data is as of |
| October 22, 2017 |
Expected to Report |
| Dec 18 |
Company Description |
 NIKE, Inc. is engaged in the design, development, marketing and selling of athletic footwear, apparel, equipment, accessories and services. The Company sells its products to retail accounts, through NIKE-owned retail stores and Internet Websites, and through a mix of independent distributors and licensees throughout the world. Nike’s portfolio brands include the NIKE Brand, Hurley and Converse. Source: Thomson Financial |
Sharek’s Take |
 Nike (NKE) has had 2018 profit estimates decline for seven straight qtrs. And it may be longer, as I went back as far as my research did. Nike ends its fiscal year on May 31st, and during the last seven qtrs 2018 estimates have declined from $2.86 to $2.76, $2.70, $2.64, $2.56, $2.43 and now $2.32. Along the way NKE stock has been up-and-down in the $50s. The P/E has stayed around 23. Normally when a stock gets the same P/E over a year, the stock will go up — by the amount the profits went up. But since 2017 estimates were $2.34 a year ago and now 2018 estimates are $2.32 this stock is stuck in neutral. In fact, I don’t see the stock getting any momentum until estimates increase. But the big issues hurting Nike are (1) Adidas is putting out some amazing product now, and is the hot brand and (2) people have stocked up on workout equipment which is so advanced it doesn’t wear out. Nike is stuck here, and I don’t envision the stock making another run higher until profit estimates stop falling. Plus, with a P/E of 23 this stock is overpriced. NKE used to sell for 20x earnings. So you’re not getting a bargain. I will sell this stock from the Conservative Growth Portfolio and keep it on the radar with the intent to add it again later. |
One Year Chart |
 Profits were down 22% last qtr, which “beat the street” only because this figure was slashed a qtr earlier. And once again NxtQtr’s estimate got slashed (this is a trend that goes back every qtr since December 2015). Qtrly profit Estimates are for -20%, 1%, 12% and 9% profit growth the next 4 qtrs. This Est. LTG was 12% two years ago, now its 8%. |
Fair Value |
 I see this stock continuing to hang around the $50s into 2019. |
Bottom Line |
 Nike got a little ahead of itself a couple of years ago when profits were growing faster than they are now. The stock’s P/E got to 31 in 2015, and that was too high. Then the stock digested the gains, and now it’s not making headway because profits aren’t growing. And with a P/E of 23 Nike isn’t even at a discount. NKE will be sold from the Conservative Growth Portfolio. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
