Why Nike's Price Dip Could Mean Bigger Profits Ahead

Core Viewpoint - Nike Inc. shares have declined, presenting a buying opportunity, with a Buy rating from Bank of America and a price target of $84, indicating a 38.2% upside from the current price of $60.80 [1][2]. Product Innovation and Strategy - Nike's Sport Offense strategy has shifted to a sports-based team model, enhancing category expertise [3]. - The launch of the Innovation Engine aims to unify design and product development across Nike, Jordan, and Converse, streamlining innovation [3]. - The company is accelerating its product pipeline with multiple launches, including Nike Skims Drop 2 and Air Max 95000, alongside lifestyle and retro releases to counteract softness in classic lines [4]. Marketing and Brand Strategy - Nike is focusing on top-of-funnel brand campaigns and storytelling, leveraging global sporting events to introduce innovations like Aero-FIT [5]. - Historical data indicates that Nike's revenue growth during World Cup quarters averages 13%, outperforming the average growth of 9% in other periods [5]. Affordable Product Strategy - Nike is expanding its accessible product offerings through value-focused retail channels, aiming to capture value-conscious consumers as discretionary spending may slow [6]. Financial Outlook - Projections indicate Nike's revenue will rise from $47.02 billion in 2026 to $50.33 billion in 2027 and $53.65 billion in 2028, with earnings per share expected to be $2.16 for 2025 and $3.68 for 2028 [7]. - The estimated dividend yield is 2.6% for 2025-2028, with a projected return on equity of 16.9% in 2026 [7]. - Nike shares were trading higher by 4.29% to $63.41 recently [7].