Athletic footwear and apparel company Nike (NYSE:NKE) raised its quarterly dividend by 9% to $0.37 per share. This translates into a forward yield of 1.4%. Further, the company highlighted that it has increased its dividend for 22 consecutive years. Nike’s strategy to consistently grow dividends shows its ability to generate sustainable, profitable growth and enhance shareholders’ value.
During the Q1 Fiscal 2024 conference call, in which it reported an earnings beat, Nike’s management pointed out that the company has been focusing on structural improvements in areas such as the supply chain to boost profitability. This includes reduced digital switch shipments and improved digital fulfillment costs, led by the company’s investments in the new transportation management system and its regional service centers.
Further, the company raised the NIKE brand’s average selling price, which will cushion its margins. Moreover, improving inventory and sequential improvements in full-price sales in China are positives. With this backdrop, let’s look at the Street’s recommendation for NKE stock.
Is Nike Stock Expected to Rise?
The average NKE stock price target of $118.48 implies a 12.04% upside potential from current levels. While Nike focuses on improving its profitability, analysts maintain a cautiously optimistic outlook as the company is battling transitory cost headwinds in the short term.
With 18 Buy and 10 Hold recommendations, Nike has a Moderate Buy consensus rating.
