NIKE(US:NKE)2025-06-30 01:02Investment Rating - The investment rating for Nike Inc. is Neutral, with a 12-month price target of US$56.00 and a current price of US$60.78 [2][3]. Core Insights - The report highlights a bearish outlook for Nike's 4Q earnings, with projected revenues decreasing from US$51,217 million in FY23 to US$45,923 million in FY25E [2]. - The EBIT margin is expected to decline significantly, from 11.5% in FY23 to 7.7% in FY25E, indicating potential profitability challenges [2]. - The report raises concerns about Nike's ability to manage inventory levels and consumer demand effectively, particularly in its "classics" business [6][7]. Financial Summary - Revenues are projected to decrease from US$51,217 million in FY23 to US$43,177 million in FY26E [2]. - EBIT is expected to drop from US$5,915 million in FY23 to US$1,473 million in FY26E [2]. - Net earnings are forecasted to decline from US$5,070 million in FY23 to US$1,355 million in FY26E [2]. - EPS is projected to fall from US$3.23 in FY23 to US$0.95 in FY26E [2]. - The dividend per share is expected to increase gradually from US$1.30 in FY23 to US$1.61 in FY26E [2]. Market Metrics - Nike's market capitalization is approximately US$89.8 billion, with a free float of 100% and an average daily trading volume of 3,936,000 shares [3]. - The stock has a 52-week range of US$97.17 to US$53.27, indicating significant volatility [3]. - The P/E ratio is projected to decrease from 34.7x in FY23 to 28.3x in FY25E, reflecting a potential decline in investor confidence [2][3]. Strategic Considerations - The report discusses Nike's strategy to partner with Amazon for direct sales, which marks a shift from its previous stance [6]. - There are questions regarding the management of tariffs and their impact on pricing and margins, particularly concerning imports from China and Vietnam [6][7]. - The report emphasizes the need for Nike to reinvigorate its running business and manage inventory levels effectively to align with consumer demand [7].