Key Stats for Nike Stock
- Past-Week Performance: -2%
- 52-Week Range: $52 to $82
- Valuation Model Target Price: $84
- Implied Upside: 30% over 2.4 years
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What Happened?
Nike stock (NKE) fell about 2% over the past week, trending lower through most sessions and finishing near $64, close to the lower end of its recent range.
The pullback came despite supportive long-term commentary, including Wells Fargo reaffirming its Buy rating. While that reinforced confidence in Nike’s brand and long-term positioning, it did little to offset near-term concerns around margin pressure.
Investor focus remained on analyst commentary highlighting tariff-driven cost pressures and heavier promotions, which reportedly pushed gross margins down roughly 300 basis points. Those margin headwinds continue to weigh on sentiment even as revenue trends show signs of stabilizing.
Positive commentary from Jim Cramer and increased retail attention helped support interest on dips, but not enough to reverse the broader caution around profitability.
Overall, the week’s move reflects a market balancing valuation support against ongoing margin risk, with shares drifting lower as investors wait for clearer evidence that discounting and cost pressures are easing.
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Is Nike Undervalued?
Under valuation model assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 3.3%
- Operating Margins: 8.6%
- Exit P/E Multiple: 31.6x
Based on these inputs, the model estimates a target price of $83.80, implying ~30% total upside from the current share price of $64 over the next 2.4 years.
Results over the next 12 months depend largely on how quickly Nike reduces markdowns, since lower promotional activity flows almost directly into higher gross margins.
Clearing older inventory is critical, as it allows Nike to lean into new product lines with stronger full-price sell-through.
Direct-to-consumer execution matters because a higher mix through Nike-owned channels improves pricing control and operating leverage even if wholesale demand stays uneven.
Product traction in running, women’s, and lifestyle categories is a key swing factor, as successful launches can drive earnings growth without requiring strong revenue acceleration.
With LTM EBIT margins at 6.5%, even modest improvements in sourcing, freight, and distribution efficiency can materially increase EPS.
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