Sneaker and athletic apparel company Nike (NKE) has stepped up its stock buybacks as its share price has sunk in recent months.
NKE stock endured a steep selloff over the summer months. Since the end of June, the company’s share price has fallen 18%, bringing its year-to-date decline to 25%. While the drop has caused much handwringing among shareholders, management has treated it as a buying opportunity.
Nike’s latest 10-Q filing with the U.S. Securities and Exchange Commission (SEC) shows that the company known for its “Swoosh” logo has increased its stock buybacks as the share price plunged in recent months. At the end of June, Nike repurchased 3.26 million shares at an average price of $94.11 each.
Nike’s Accelerating Share Repurchases
The filing with the SEC shows that Nike’s stock buybacks accelerated in July as its share price sunk further. The company bought back 6.16 million shares throughout July at an average cost of $74.19 each. The stock buybacks slowed in August but still totaled 5.39 million repurchases at an average price of $79.76.
Overall, Nike spent $1.18 billion on stock buybacks from the end of June through the end of August this year. The company has a stock buyback plan in place that authorizes a total of $18 billion in share repurchases between 2022 and 2026. There is now $8 billion left of that share repurchase authorization.
Stock buybacks reduce the number of shares available on the open market and increase the value of the remaining shares by reducing the existing supply. Nike’s new CEO Elliott Hill has said that improving corporate performance and raising the share price are among his top priorities.
Is NKE Stock a Buy?
Nike stock has a consensus Moderate Buy rating among 28 Wall Street analysts. This is based on 13 Buy and 15 Hold ratings assigned in the last three months. There are no Sell ratings on the stock. The average NKE price target of $92.72 implies 14.81% upside potential.
