NIKE, Inc. Faces Challenges Amid Market Underperformance

Valued at a market capitalization of $84.8 billion, NIKE, Inc. (NKE) stands as a premier global sportswear and athletic footwear company located near Beaverton, Oregon. It operates through three main segments: Nike Brand, Converse, and Jordan Brand. The range of products encompasses footwear, apparel, equipment, and accessories designed for men, women, and children.

Over the last 52 weeks, NKE shares have struggled compared to the broader market. The company’s stock has plummeted by 38.9%, while the S&P 500 Index ($SPX) has increased by 8.2%. Year-to-date, NKE shares are down 24.6%, contrasting with SPX’s decline of just 4.7%.

In a tighter comparison, NIKE has also fallen behind the Consumer Discretionary Select Sector SPDR Fund (XLY), which has posted a return of 9.9% over the past year, while the sector itself has decreased by 12% year-to-date.

In April, Nike’s stock dropped by 11% due to concerns about new tariffs, decreasing consumer spending, and weaker-than-expected third-quarter results, which included a 7% drop in revenue and a 10% fall in Nike Direct sales.

For the current fiscal year ending in May, analysts predict that NKE’s earnings per share (EPS) will decline by 45.6% year-over-year, dropping to $2.15. However, the company’s history of earnings surprises is favorable; it has outperformed consensus estimates in the past four quarters.

Among 36 analysts following the stock, the consensus rating stands at “Moderate Buy.” This is based on 16 “Strong Buy” ratings, two “Moderate Buy,” 16 “Holds,” and two “Strong Sells.”

This rating configuration reflects a decreased bullish sentiment compared to a month prior, which included 17 “Strong Buy” ratings.

On May 5, analyst Matthew Boss of JPMorgan Chase & Co. (JPM) maintained a “Neutral” rating on NIKE but adjusted the price target down from $64 to $56.

Currently, NKE’s average price target stands at $75.27, indicating a potential upside of 32% from current prices. The highest target on the street is $120, suggesting a possible increase of 110.4%.

On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.