Nike Stock Price

BUY - rate is expected to increase, i.e. the first currency gains value against the second currency.
SELL - rate is expected to go down, i.e. the first currency is expected to lose value against the second currency.

Having been around for some 5 decades, Nike is not a company focused on self preservation. Its approach is still one of aggressive growth and expansion and as such, it is always an interesting option for investors.

Nike’s target markets are athletic footwear, accessories, equipment and apparel. In these markets, it most definitely possesses an enviable enduring competitive advantage.

Sales are conducted through its factories, physical retail locations as well as online.

While Nike’s brand awareness is quite possibly the best in the world (the swoosh logo is presumably familiar to all humans), it possesses a number of subsidiaries, with their own niche target markets and brand reach.

Such subsidiaries are Converse and Hurley. These brands have done very well over the last few years as well, contributing significantly to Nike’s ever-swelling coffers.

In line with its increasing market share and profits, Nike’s stock price movement has been exceptional over the last few years. It has in fact clearly bested the S&P500 index, thus proving that it presented a well above-average investment opportunity.

The gap between Nike stock performance and the S&P500 began to widen in 2013, and it has been increasing since.

To further boost its margins, Nike has begun focusing on the exclusion of middle-men from its sales chains. This new direct-to-consumer policy should bear fruit soon, driving the performance of the stock higher still.

What else drives the price of Nike stock?

Given the size and the exposure of the company, such factors are numerous and quite impossible to account for in their entirety.

Continued focus on brand recognition via superstar athlete endorsements is still obviously in the books. Pushing the envelope ever further in this regard, Nike has entered into a contract with the NBA itself, looking to displace its rival Adidas.

Ever-increasing sales in China are a major factor in Nike’s profitability equation. As the middle class continues to grow across the emerging markets, demand for Nike products continues to grow as well. In this regard, the company has done a great job harnessing the global trends to its advantage.

While focusing on emerging markets, Nike has not lost sight of the US either. Though its US sales dropped by some 6% in 2018, a turn-around in this regard is expected by company bigwigs.

Orders are already building and the continuous revamping of the merchandize is slated to deliver in this regard.

Research and development has always been part and parcel of Nike’s operation. Lately, efforts have been stepped up in this regard as well. New products are being rolled out, accompanied by new store experiences.

The above factors have prompted pundits to predict that Nike stock will flirt with new highs this year.

Conclusion

While Nike may look like it will continue growing in perpetuity, its growth could be sidelined by increasingly successful competition, the simple kinks of human nature when it comes to what is fashionable and what is not, currency movements or an economic slowdown in China…

BUY - rate is expected to increase, i.e. the first currency gains value against the second currency.
SELL - rate is expected to go down, i.e. the first currency is expected to lose value against the second currency.