Nike’s stock market performance hasn’t been impressive this year
Nike (NKE), which has been one of the strongest performers in the apparel sector, is down 18% year-to-date (or YTD). The company has underperformed rivals Lululemon Athletica (LULU) and Columbia Sportswear (COLM), which are up 31% and 25%, respectively. Rival Under Armour (UAA) is also in the red with YTD losses of 24%.
In comparison, the S&P 500 Index and the Dow Jones are up by 10% and 12%, respectively, while the Consumer Discretionary Select Sector SPDR ETF (XLY) is up by 6%. Nike is the worst-performing Dow stock this year.
Increasing competition from Under Armour and Adidas, reported bankruptcies of several sporting goods retailers, concerns over future orders, and persistent currency headwinds have weighed on Nike’s stock price this year.
The company has been downgraded by several brokerage houses on its falling market share. Read more about Wall Street recommendations in part seven of the series.
Can we expect some improvement in Nike’s stock price?
Nike is currently trading at $54.87, 32% below its 52-week high price. Wall Street expects its stock price to touch $62.35 within the next 12 months, which indicates an upside of ~20% to the company’s December 14 stock price.
Nike has a better upside as compared to Columbia Sportswear and Lululemon Athletica. The stock prices of these two companies are expected to rise 6% over the next year. Under Armour is also expected to gain momentum and register a 20% stock price jump in the coming 12 months.
Nike offers regular dividends to boost its investor returns. Read the next part to know more about the company’s dividend policy and repurchase programs.