NKE - Buy Nike: Mr. Market Dumps This Top 10 Brand For 20% Discount

2024-06-29 15:36:44 ET

Summary

• Nike stock crashed 20% due to weaker than expected guidance for FY 2025, despite solid Q4 FY 2024 results.
• The world's leading sports apparel and footwear company indicated that it expects sales for FY 2025 to decline by about mid-single digits.
• Despite this short-term setback, I believe the sell-off presents an attractive buying opportunity for investors seeking a high-quality franchise at a discounted price.
• In my assessment, Nike is well-positioned to remain a dominant force in the sports industry due to its unparalleled brand strength, extensive global market presence, and exceptional athlete endorsement strategy.
• Whenever Mr. Market offers you a top 10 global brand for a 20% discount, you should probably take the deal. This time is should be no different. "Buy".

Nike stock crashed almost 20% after the company reported solid results for Q4 FY 2024, but offered weaker than expected guidance: The world's leading sports apparel and footwear company said that it expects sales for FY 2025 to be down by about mid single digit. On a long-term basis, however, I think the sell-off creates an attractive opportunity for investors to buy a high quality franchise at bargain prices. In my view, Nike is poised to remain a winner in the sports industry, due to unparalleled brand strength, global market presence, and a best-in-class athlete endorsement strategy. As a function of valuation anchored on a residual earnings model, I assign a "Buy" rating to Nike shares and set my target price at $91. ...

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