NKE - Embedded Expectations Analysis - 2021 04 29
NIKE, Inc. (NKE:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 31.5x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about supply chain delays, customer engagement, and digital investment opportunitiesSpecifically, management may lack confidence in their ability to respond to transportation delays and port congestion, enable a digitally-focused supply chain, and introduce the Jordan brand to a broader set of consumers. Management may also be exaggerating their leadership position in athlete sponsorship, and they may lack confidence in their ability to offer a seamless digital and physical experience for customers. In addition, they may lack confidence in their ability to increase customer engagement, leverage marketing opportunities, and capitalize on data science and machine learning investments. Moreover, management may have concerns about the sustainability of differentiated retail demand, their investments in women's apparel innovation, and continued store closure
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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