Still Not Comfortable With Buying Nike

Summary:

  • Nike’s revenue has increased by 10% in the full year YoY and 16% on a currency-neutral basis, indicating stronger demand for its products.
  • However, the company’s margins have contracted due to higher input costs and elevated freight costs, leading to declining profitability.
  • Nike’s stock is trading at a significant premium to its peers, making its valuation unjustified, in our view.
  • For these reasons, we maintain our “hold” rating.

Nike Fans Waiting in Line

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NIKE, Inc., (NYSE:NKE) together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, accessories, and services worldwide.

We have initiated coverage on the firm in June 2022 with a neutral rating. Since then, we have published two


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Past performance is not an indicator of future performance. This post is illustrative and educational and is not a specific offer of products or services or financial advice. Information in this article is not an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. This article has been co-authored by Mark Lakos.

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