Nike Q4 Earnings Preview: Analyst Estimates, Olympics, Soccer, Caitlin Clark, Hyperice Partnership Top Items To Watch
Apparel and footwear company Nike Inc (NYSE:NKE) is set to report fourth-quarter financial results after market close Thursday.
Here are the earnings estimates, what analysts are saying and key items to watch.
Earnings Estimates: Analysts expect Nike to report fourth-quarter revenue of $12.91 billion according to data from Benzinga Pro.
The company reported revenue of $12.83 billion in last year's fourth quarter, making the estimate a slight increase on a year-over-year basis.
Nike has beaten analysts' revenue estimates in eight of the last 10 quarters.
Analysts expect Nike to report fourth-quarter earnings per share of 85 cents, compared to 66 cents per share in last year's fourth quarter. The company has beaten analysts' earnings per share estimates in three straight quarters and nine of the last 10 quarters.
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What Analysts Are Saying: Nike shares could rebound after seeing year-to-date declines, Oppenheimer analyst Brian Nagel recently said.
The analyst upgraded Nike shares from Perform to Outperform and raised the price target from $110 to $120.
Nagel said Nike shares are trading at multiples consistent with "historic troughs" that were "last achieved in 2017."
The analyst points to several headwinds for Nike, but sees opportunities to "offset still challenged macro and competitive dynamics" in the short term.
Nagel sees Nike senior leadership refocusing on product innovation.
"Our now more constructive call on shares is generally intermediate to longer-term in focus," Nagel said.
Goldman Sachs analyst Brooke Roach highlighted Nike's innovation efforts in a recent investor note.
The analyst has a Buy rating and $118 price target and finds the innovation pipeline encouraging.
China is a key item for investors to watch in fourth-quarter results, according to the analyst.
Here are other analyst ratings on Nike and their price targets:
- Telsey: Outperform rating, $115 price target
- JPMorgan: Overweight rating, lowered price target from $122 to $116
- Truist: Hold rating, $99 price target
- Morgan Stanley: Overweight rating, lowered price target from $116 to $114
- Deutsche Bank: Reinstated with Buy rating, $115 price target
- Wells Fargo: Overweight rating, lowered price target from $120 to $115
Key Items to Watch: Nike continues to focus on transformation and innovation to return to growth.
"We are making the necessary adjustments to drive Nike's next chapter of growth," Nike CEO John Donahoe said after third quarter results.
Investors and analysts will be looking for commentary on new products and how Nike is returning to growth.
The commentary comes as some analysts and investors see On Holding (NYSE:ONON) as a key competitor taking market share away from Nike in footwear categories.
Shares of On Holding are up 26% over the last year and up 44% year-to-date in 2024. Nike stock, meanwhile, is down 15% over the last year and down 14% year-to-date in 2024.
Sports Endorsements
Nike signed a deal with WNBA number one overall pick Caitlin Clark. The brand also has deals with Sabrina Ionescu and A'ja Wilson.
As WNBA ratings and visibility have grown in 2024, Nike could benefit from its key endorsements. Any commentary on Clark could be a potential catalyst for investors.
Also in the world of sports endorsements, Nike could share commentary on its partnerships with soccer teams as the Euro 2024 and Copa America 2024 are ongoing. The 2024 Summer Olympics could also be a focus as Nike is typically a large sponsor of athletes and can also use the event to highlight new products and technology.
Nike recently teamed up with Hyperice to create wearable technology to help with athlete performance. The partnership sees the Nike x Hyperice boot and Nike x Hyperice vest being released, which offer heating and cooling technology.
"Recovery is an important part of any athlete's journey, but we're hearing from athletes that the concept of ‘pre-covery' is equally as important," Nike Athlete Innovation Senior Director Tobie Hatfield said.
Nike athlete and 2024 Summer Olympics competitor Sha'Carri Richardson said she is using the Nike x Hyperice boots as part of her recovery. NBA star LeBron James is also using the Nike x Hyperice boots and vest.
"I knew they were going to change the game for athletes' warm-up and recovery," James said.
The new product partnership could be one for investors to watch as Hyperice counts several athletes including Jayson Tatum, Connor McDavid, Rory McIlroy, Klay Thompson and Patrick Mahomes as investors.
NKE Price Action: Nike shares trade at $93.42 versus a 52-week trading range of $88.66 to $123.39.
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