Nike Is Having a Great Year — But Is It Too Late to Buy at These Prices?

So far in 2020, Nike stock has risen 39 percent. Is the stock a buy or sell at this price? How's the company's outlook?

Ambrish Shah - Author

Dec. 18 2020, Published 11:18 a.m. ET

Is Nike a Good Stock to Buy?
Source: Nike

On Dec. 17, Nike stock rose by 1.6 percent, while the S&P 500 gained 0.6 percent. The stock has risen $2.16 from its previous closing price of $138.34 on a volume of 7,577,604 shares. Over the past year, the S&P 500 has risen by 16.1 percent, while Nike stock has gained 38.9 percent. Is Nike stock a buy or sell at this price?

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Nike is likely to release its quarterly earnings report after the market-hours today. In the second quarter, Wall Street analysts expect Nike to post sales of $10.6 billion, which would be 2.2 percent higher than $10.3 billion in sales in the second quarter of fiscal 2020. Analysts also expect Nike to post an adjusted EPS of $0.62 in the second quarter compared to $0.70 in the same quarter a year ago.

Is Nike a Good Stock to Buy?
Source: Nike Facebook
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A Nike stock split isn't likely this year.

Nike stock isn’t likely to split in 2020. Its last stock split was in 2015. It was a 2-for-1 stock split, which means that an additional share is given for each share held by an existing shareholder.

Nike is being called a "bull trap" on Stocktwits.

Nike stock has become a major talking point on social media platforms. An investor going by the name showmeyourDD on Stocktwits thinks that the recent rally in Nike stock is a bull trap. The stock isn’t likely to open a gap up after reporting earnings results. The investor added that Ike stock is currently higher by $40 than the pre-pandemic levels.

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Does Nike pay dividends?

Nike stock pays an annual dividend of $1.10 per share with a dividend yield of 0.78 percent. The company’s most recent quarterly cash dividend payment was made to stockholders of record on Oct. 1.

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What is Nike’s stock forecast?

As of 7:40 a.m. ET in pre-market trading on Dec. 18, Nike stock was up by about 0.6 percent at $141.28. Nike stock has risen by 2.1 percent in the last five days and 38.9 percent in the last year. The stock is trading 0.2 percent below its 52-week high of $140.74 and 134.2 percent above its 52-week low of $60.

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According to estimates compiled by CNN, analysts' median target price of $152 for Nike is 8.2 percent above its current stock price. Among the 35 analysts tracking Nike, 30 recommend a buy, four recommend a hold, and one recommends a sell. The highest target price of $185 is 31.7 percent above the stock's current price, while the lowest target price of $117 is 16.7 percent below the stock's current price.

So, is Nike stock a good buy?

I believe Nike stock is a buy for long-term investors based on the strong growth outlook. The company’s digital sales are growing rapidly. In the quarter ended August, Nike’s digital sales grew by 82 percent year-over-year, and management sees acceleration going forward. Nike has also benefited from a shift toward active and healthy lifestyles. The company’s sales are also likely to surge as sports leagues have restarted.


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