NKE - Embedded Expectations Analysis - 2019 08 06
NIKE, Inc. (NKE:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with a 28.4x Uniform P/E, implying bullish expectations for the firm. However, management may be concerned about growth in China, consumer engagement in Nike Digital, and product innovation.Specifically, management may be concerned about the sustainability of their leadership position in bra sales in North America, and they may lack confidence in their Joyride technology. Furthermore, they may lack confidence in their ability to grow their international Nike App user base, and they may be concerned about the sustainability of improved retail engagement rates in the Nike App. Moreover, management may lack confidence in their ability to continue innovating their footwear, and they may be exaggerating the value of their partnerships with Tmall and WeChat. In addition, management may be concerned about the sustainability of growth in China and they appear concerned about ongoing SG&A headwinds.
NIKE is engaged in the design, development and marketing and selling of athletic footwear, apparel, equipment, accessories and services. The company focuses its NIKE Brand product offerings in Running, NIKE Basketball, the Jordan Brand, Football (Soccer), Training and Sportswear categories. The company markets products designed for kids, as well as for other athletic and recreational uses such as American football, baseball, cricket, golf, lacrosse, tennis, walking, and other outdoor activities. The company has license agreements that permit unaffiliated parties to manufacture and sell, using the company-owned trademarks, certain apparel, digital devices and applications and other equipment designed for sports activities.
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