Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 29 Jul, 25 | NKE | Buy | USD 79.24 | USD 83.2 | USD 88.0 | 51 days | Closed |
8.00%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, accessories, and services worldwide. The company provides athletic and casual footwear, apparel, and accessories under the Jumpman trademark; and casual sneakers, apparel, and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks. It also sells a line of performance equipment and accessories comprising bags, sport balls, socks, eyewear, timepieces, digital devices, bats, gloves, protective equipment, and other equipment for sports activities under the NIKE brand; and various plastic products to other manufacturers. In addition, the company markets apparel with licensed college and professional team, and league logos, as well as sells sports apparel; and licenses unaffiliated parties to manufacture and sell apparel, digital devices, and applications and other equipment for sports activities under NIKE-owned trademarks. It sells its products to footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other retail accounts through NIKE-owned retail stores, digital platforms, independent distributors, licensees, and sales representatives. NIKE, Inc. was founded in 1964 and is headquartered in Beaverton, Oregon.
Reduction in Operating Overhead Expenses: NIKE achieved cost efficiencies in FY25 by reducing its operating overhead expenses to USD 11.40 billion, down 7% from USD 12.29 billion in FY24
Increased Shareholder Payouts: The company distributed USD 2.3 billion in dividends during FY25, marking a 6% increase over the USD 2.17 billion paid in FY24
Sharp Decline in Net Income: In the FY25 NIKE, Inc. reported net income of USD 3.22 billion, a steep 44% decline compared to USD 5.70 billion in the FY24
Revenue Contraction Across All Divisions: For FY25, NIKE recorded total revenues of USD 46.31 billion, representing a 10% decrease from the USD 51.36 billion posted in FY24
NIKE faces heightened investment risk from declining digital sales and profitability compression, compounded by ongoing macroeconomic uncertainty and execution challenges in realigning its business strategy
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 79.24 | 72.9 | 83.2 | 88.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Full-Year and Quarterly Revenue Performance: NIKE, Inc. reported fiscal 2025 revenue of USD 46.3 billion, representing a 10% decline on a reported basis and a 9% decline on a currency-neutral basis compared to the previous year. For the fourth quarter, total revenue was USD 11.1 billion, a decrease of 12% on a reported basis and 11% on a currency-neutral basis. The NIKE Brand contributed USD 44.7 billion to annual revenue, down 9%, while Converse revenue stood at USD 1.7 billion, marking a 19% decline.
Direct-to-Consumer and Wholesale Segment Trends: NIKE Direct revenues for the fourth quarter totaled USD 4.4 billion, down 14% both on a reported and currency-neutral basis, driven largely by a 26% decline in NIKE Brand Digital. Conversely, NIKE-owned store sales rose slightly by 2%. Wholesale revenues were USD 6.4 billion for the quarter, down 9%. For the full year, wholesale revenues declined 7% to USD 25.9 billion, reflecting broader softness across distribution channels.
Profitability and Expense Dynamics: Gross margin for the fourth quarter declined by 440 basis points to 40.3%, primarily due to higher promotional activity and an unfavorable channel mix. For the full fiscal year, gross margin contracted 190 basis points to 42.7%. Selling and administrative expenses decreased by 3% to USD 16.1 billion annually, with a 7% decline in operating overhead attributed to lower wage-related and administrative costs. However, demand creation expenses rose 9% to USD 4.7 billion, reflecting increased brand and sports marketing efforts.
Earnings and Taxation Overview: Fourth-quarter net income dropped significantly by 86% to USD 0.2 billion, with diluted earnings per share (EPS) at USD 0.14. For the full fiscal year, net income was USD 3.2 billion, representing a 44% decline, and diluted EPS stood at USD 2.16, down 42%. The effective tax rate increased to 33.6% in Q4, up from 13.1% in the prior year, mainly due to reduced benefits from stock-based compensation and lower pre-tax income. On a full-year basis, the effective tax rate was 17.1%.
Balance Sheet Highlights: As of May 31, 2025, inventories remained stable year-over-year at USD 7.5 billion. Cash and equivalents, along with short-term investments, totaled USD 9.2 billion, a decrease of approximately USD 2.4 billion. This decline was driven by significant outflows from share repurchases, dividend payments, bond repayments, and capital expenditures.
Shareholder Returns and Capital Allocation: NIKE continued its long-standing commitment to shareholder returns, marking its 23rd consecutive year of dividend increases. During the fourth quarter, the company returned USD 0.8 billion to shareholders, including USD 591 million in dividends and USD 202 million in share repurchases. For the full fiscal year, NIKE returned USD 5.3 billion—USD 2.3 billion in dividends and USD 3.0 billion in buybacks. As of May 31, 2025, a total of 122.6 million shares had been repurchased under the ongoing USD 18 billion program.
Strategic Outlook and Business Repositioning: NIKE leadership acknowledged that financial performance aligned with internal expectations but fell short of long-term goals. The company is advancing its "Win Now" strategy to drive business turnaround and accelerate growth through a newly introduced “sport offense” approach. This initiative focuses on enhancing category distinction, broadening the product portfolio, building emotional consumer connections, and elevating retail presence. Management anticipates moderating headwinds and improved performance in the coming fiscal year.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Speculative Buy’ recommendation has been given on Nike, Inc (NYSE: NKE) at the closing market price of USD 79.24, as on July 28, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Cyclical Industry: Footwear & Accessories
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| NKE Nike Inc |
-1.12 1.67% | 66.00 | 31.59 | 32.68 | 3.59 | 13.23 | 3.66 | 28.05 |
| ADDDF Adidas AG |
- -% | 197.89 | 108.41 | 31.25 | 1.98 | 8.21 | 2.02 | 22.24 |
| ADDYY Adidas AG ADR |
-2.33 2.35% | 96.69 | 101.71 | 31.75 | 2.00 | 8.35 | 2.05 | 22.50 |
| DECK Deckers Outdoor Corporation |
-0.76 0.73% | 103.44 | 30.03 | 26.18 | 4.62 | 10.04 | 4.47 | 20.56 |
| ASCCF ASICS Corporation |
- -% | 24.24 | 27.82 | 20.58 | 0.02 | 6.58 | 3.44 | 23.97 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is Jul 28,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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