NKE - Embedded Expectations Analysis - 2021 11 05
NIKE, Inc. (NKE) currently trades at a historical high and above corporate averages relative to Uniform earnings, with a 39.1x Uniform P/E (Fwd. V/E').At these levels, markets are pricing in expectations for Uniform ROA to expand to a record-high, accompanied by 5% Uniform asset growth.
However, if sustained going forward, analyst expectations for 31.6% Uniform ROA and 4.5% Uniform asset growth, would imply a stock price closer to $88.66, representing approximately 35% equity downside for the firm.
Moreover, the firm's most recent earnings call suggests management may have concerns about their supply chain and digital channel.
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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