Analysis on Nike Inc
Morgan Stanley predicts a big rally ahead for Nike on new sneakers:
https://www.cnbc.com/2017/07/19/morgan-stanley-predicts-nike-shares-will-rally-nearly-20-percent.html
Morgan Stanley wrote:
"We think the window to buy Nike at the bottom of a cycle is closing. Nike EPS and North America sales growth rates are likely troughing," Sole wrote in the report Wednesday. "We believe new Nike products like Air VaporMax, fashion shifts, and Nike's improving-more-rapidly-than-expected speed-to-market capabilities reverse headwinds experienced over the last 18 months."
Nike is a company that have rising revenue, rising earnings and falling outstanding number of shares.
Stock price = Earnings per shares (EPS) x price earnings ratio (PE)
When outstanding number of shares is shrinking, all things equal, earnings per share will rise, and share price has higher potential to rally.
Falling outstanding number of shares also means Nike is buying back shares using own capital. This could means that the management team think that their stock is undervalued.
Attached shows the cheat sheet of Nike. Their target is to achieve USD50bil revenue by 2020. To achieve that, the plan is to grow its USA & China market and e-commerce segment.
Now annual revenue is USD34.35bil. Even if Nike did not achieve their target of USD50bil, they will still achieve a decent growth rate.
Current share price is depressed. It has not priced in any of the good news mentioned above.
https://www.cnbc.com/2017/07/19/morgan-stanley-predicts-nike-shares-will-rally-nearly-20-percent.html
Morgan Stanley wrote:
"We think the window to buy Nike at the bottom of a cycle is closing. Nike EPS and North America sales growth rates are likely troughing," Sole wrote in the report Wednesday. "We believe new Nike products like Air VaporMax, fashion shifts, and Nike's improving-more-rapidly-than-expected speed-to-market capabilities reverse headwinds experienced over the last 18 months."
Video on Air VaporMax:
https://youtu.be/fbiYRnR8kZM
https://youtu.be/fbiYRnR8kZM
Nike is a company that have rising revenue, rising earnings and falling outstanding number of shares.
Stock price = Earnings per shares (EPS) x price earnings ratio (PE)
When outstanding number of shares is shrinking, all things equal, earnings per share will rise, and share price has higher potential to rally.
Falling outstanding number of shares also means Nike is buying back shares using own capital. This could means that the management team think that their stock is undervalued.
Attached shows the cheat sheet of Nike. Their target is to achieve USD50bil revenue by 2020. To achieve that, the plan is to grow its USA & China market and e-commerce segment.
Now annual revenue is USD34.35bil. Even if Nike did not achieve their target of USD50bil, they will still achieve a decent growth rate.
Current share price is depressed. It has not priced in any of the good news mentioned above.
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