Morningstar

Nike Inc Class B NKE

Morningstar Rating
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Stock XNYS Rating as of
$44.69 +0.73 (1.65%)
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As of Cboe BZX Real-Time Price Open

Company Report

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Nike’s Focus on Innovation and Its Competitive Advantages Should Bring Better Results

David Swartz

We view Nike as the leader of the athletic apparel market and believe it will recover from recent problems, including lackluster product development, soft demand for sportswear, and strained relationships with wholesale accounts. Our wide moat rating is based on its intangible brand asset, as we believe it will maintain premium pricing and generate economic profits for at least 20 years. With global visibility through its many sports sponsorships, Nike is the largest athletic footwear brand in all major categories and in most markets. The firm faces significant competition, but we believe it has proven over a long period that it can maintain share and pricing.

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Price vs Fair Value

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NKE is trading at a 164% premium.
Price
$44.65
Fair Value
$81.00
Uncertainty
High
1-Star Price
$351.68
5-Star Price
$69.70
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The global sportswear market continues to expand, especially in Asia and other developing markets. As the share leader, Nike is positioned to benefit.

Bears

Nike has had a tumultuous period due to economic issues in key regions and its own mistakes. Given the depth of its problems, the timing of a turnaround is uncertain, especially in China.

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Trading Information

Previous Close Price
$43.96
Day Range
$44.25–44.95
52-Week Range
$41.36–80.16
Bid/Ask
$44.70 / $44.71
Shares Outstanding
1.48B
Market Cap
$66.11B
Volume/Avg
2M / 23M

Key Statistics

Price/Earnings (Normalized)
29.57
Price/Sales
1.42
Dividend Yield (Trailing)
3.65%
Dividend Yield (Forward)
3.67%
Total Yield
4.17%

Company Profile

Nike is the largest athletic footwear and apparel brand in the world. Footwear generates about two-thirds of its sales. Key performance footwear categories include basketball, running, and football (soccer). Its brands include Nike, Jordan (premium athletic footwear and clothing), NikeSkims (women’s athleisure), and Converse (casual footwear). Nike sells products worldwide through company-owned stores, franchised stores (including about 5,500 in China), and third-party retailers. The firm also operates e-commerce platforms in more than 40 countries. Nearly all its production is outsourced to contract manufacturers in more than 30 countries. Nike was founded in 1964 and is based in Beaverton, Oregon.
Sector
Consumer Cyclical
Industry
Footwear & Accessories
Stock Style Box
Mid Value
Total Number of Employees
77,800
Website
https://www.nike.com

Competitors

Valuation

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Metric
NKE
UAA
PUM
Price/Earnings (Normalized)
 29.5748.1727.22
Price/Book Value
 4.691.742.12
Price/Sales
 1.420.500.56
Price/Cash Flow
 18.06227.87—
Price/Earnings
NKE
UAA
PUM

Financial Strength

Metric
NKE
UAA
PUM
Quick Ratio
 1.240.590.49
Current Ratio
 2.141.621.27
Interest Coverage
 —−5.63−5.86
Quick Ratio
NKE
UAA
PUM

Profitability

Metric
NKE
UAA
PUM
Return on Assets (Normalized)
 7.56%1.07%−6.89%
Return on Equity (Normalized)
 20.49%2.93%−22.76%
Return on Invested Capital (Normalized)
 11.06%2.17%−8.66%
Return on Assets
NKE
UAA
PUM

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