Morningstar

Nike Inc Class B NKE

Morningstar Rating
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Stock XNYS Rating as of
$89.44 +0.05 (0.06%)
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As of Delayed Price Closed

Company Report

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Nike: CEO Switch Is Part of Plan to Return to Winning Ways; Shares Undervalued

David Swartz

Nike announced that CEO John Donahoe is leaving and will be replaced by former executive Elliott Hill. Donahoe has been under intense pressure in recent months after the firm had essentially no sales growth in fiscal 2024 and guided to lower revenue in fiscal 2025. Although he had a strong background in consulting and technology when he was named CEO in 2019, he did not have apparel and footwear experience. In contrast, Hill worked at Nike for 32 years before his retirement in 2020, with his last title being president of consumer and marketing. Clearly, Nike’s board (including the controlling Knight family) wanted a leader with extensive company knowledge to address its recent problems, the most pressing of which is that Donahoe’s efforts to prioritize direct selling over product development and retail relationships have seemingly created opportunities for more innovative competitors.

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Price vs Fair Value

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NKE is trading at a 125% premium.
Price
$89.44
Fair Value
$346.00
Uncertainty
Medium
1-Star Price
$362.20
5-Star Price
$87.20
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Although uneven of late, the global sportswear market should expand, especially in Asia and other developing areas. As the share leader in most countries, Nike is positioned to benefit.

Bears

As a worldwide business, Nike has felt the effects of issues like the war in Ukraine, shipping delays, currency volatility, and inflation. These and other issues could continue to impair its results.

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News

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Trading Information

Previous Close Price
$89.39
Day Range
$89.21–90.26
52-Week Range
$70.75–123.39
Bid/Ask
$89.55 / $89.74
Market Cap
$134.10 Bil
Volume/Avg
9.2 Mil / 16.1 Mil

Key Statistics

Price/Earnings (Normalized)
22.59
Price/Sales
2.66
Dividend Yield (Trailing)
1.65%
Dividend Yield (Forward)
1.65%
Total Yield
4.82%

Company Profile

Nike is the largest athletic footwear and apparel brand in the world. Key categories include basketball, running, and football (soccer). Footwear generates about two thirds of its sales. Its brands include Nike, Jordan (premium athletic footwear and clothing), and Converse (casual footwear). Nike sells products worldwide through company-owned stores, franchised stores, 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
Large Value
Total Number of Employees
79,400
Website
https://www.nike.com

Competitors

Valuation

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Metric
NKE
LULU
UAA
Price/Earnings (Normalized)
 22.5920.7315.88
Price/Book Value
 9.328.592.13
Price/Sales
 2.663.540.72
Price/Cash Flow
 20.3816.2731.80
Price/Earnings
NKE
LULU
UAA

Financial Strength

Metric
NKE
LULU
UAA
Quick Ratio
 1.511.330.91
Current Ratio
 2.402.431.73
Interest Coverage
 ———
Quick Ratio
NKE
LULU
UAA

Profitability

Metric
NKE
LULU
UAA
Return on Assets (Normalized)
 16.76%26.84%−0.33%
Return on Equity (Normalized)
 44.27%44.88%−0.79%
Return on Invested Capital (Normalized)
 23.34%33.51%−0.56%
Return on Assets
NKE
LULU
UAA

Footwear & Accessories Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
adidas AG
ADDDF
JMMpvpm$48.0 Bil
 adidas AG ADR
ADDYY
RnwvhvvdLzwwhxq$48.0 Bil
 Deckers Outdoor Corp
DECK
—Vzc$24.3 Bil
 On Holding AG
ONON
—Vsdxmt$16.4 Bil
 ASICS Corp ADR
ASCCY
—Sjvdq$15.3 Bil
 ASICS Corp
ASCCF
—Lncb$15.3 Bil
 Skechers USA Inc Class A
SKX
FzwkwvvPklxdz$10.4 Bil
 Birkenstock Holding PLC
BIRK
—Crnsnl$9.3 Bil
 Crocs Inc
CROX
—Cfdd$8.6 Bil

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