Shares of NIKE, Inc. (NKE) jumped almost 14% in Thursday’s extended trading session after the company delivered a blowout fiscal fourth quarter, driven by strong sales. NIKE is a manufacturer of footwear, apparel, equipment, accessories, and services.
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The company reported revenues of $12.3 billion, which surpassed Street estimates of $11.1 billion and jumped 96% from the year-ago period, reflecting a recovery of its business operations.
Revenues from the NIKE Brand increased 88% year-over-year to $11.8 billion, while revenues for Converse were up 85% at $596 million.
Earnings came in at $0.93 per share, beating consensus estimates of $0.51 per share. A loss of $0.51 per share was reported in the same quarter last year.
NIKE CEO John Donahoe said, “FY21 was a pivotal year for NIKE as we brought our Consumer Direct Acceleration strategy to life across the marketplace. Fueled by our momentum, we continue to invest in innovation and our digital leadership to set the foundation for NIKE’s long-term growth.” (See NKE stock chart on TipRanks)
On June 22, BTIG analyst Camilo Lyon reiterated a Buy rating on the stock but decreased the price target to $153.00 from $162.00. This implies 14.5% upside potential to current levels.
Lyon commented, “We point out that NKE has been supportive of the Chinese Government’s effort to ramp up its national athletic program over the years, and as such we could see a quick yet quiet resolution to current restraints, consumer-led or otherwise, on the brand. That said, potentially more disruptive to NKE (and global brands in general) is the “guochao” trend that favors consumption of national brands like Anta (2020-HK, Not Rated) and Li Ning (2331-HK, Not Rated), a trend that has principally been adopted by younger, digitally savvy consumers.”
Consensus among analysts is a Strong Buy based on 15 Buys, 2 Holds, and 1 Sell. The average NKE analyst price target of $164 implies 22.8% upside potential from the current levels. Shares have gained 31.8% over the past year.
NIKE scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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