Nike Inc., the world's leading shoe and apparel company, designs, develops and markets athletic footwear, apparel, equipment, and accessory products for men, women, and children. Nike owns over 1 000 retail stores worldwide, with 36% of these stores in the United States.
The company is a leader in the athletic footwear and apparel space, with long-term growth being driven by product innovation and digital expansion, coupled with more personalised consumer experiences.
Technically, the price appears to be in a markup phase from a stock market cycle perspective (see the notation on the chart as well as the insert). A markup phase is characterised by a sustained and significant upward movement in price. It occurs when investors' confidence is high, and they are optimistic about the future performance of a stock. This positive sentiment encourages buying activity, pushing prices higher.
The stock is trading below, but moving towards, its 200-day simple moving average (SMA) of ~$113.
Our bullish bias is supported by fading downside price momentum, as indicated by the Moving Average Convergence Divergence (MACD) histogram, as well as the recent upwards trajectory of the On-balance Volume (OBV) indicator.
Share Information
| Share code | NKE |
|---|---|
| Industry | Consumer Durables & Apparel |
| Market Capital (ZAR) | 167.38 billion |
| One year total return | -0.95% |
| Return year-to-date | -5.95% |
| Current price(ZAR) | 109.40 |
| 52 weeek high(ZAR) | 131.31 |
| 52 week low(ZAR) | 82.22 |
| Financial year end | May |
| Closing paragraph | The share price is starting to recover, with various technical indicators pointing toward decent upside from current levels. |
Consensus Expectations (Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 3.23 | 3.74 | 4.40 | 5.13 |
| Growth (%) | 15.76 | 17.57 | 16.58 | |
| Dividend Per Share (USD) | 1.33 | 1.43 | 1.58 | 1.72 |
| Growth (%) | 7.62 | 10.73 | 8.61 | |
| Forward PE (times) | 29.26 | 24.89 | 21.35 | |
| Forward Dividend Yield (%) | 1.30 | 1.44 | 1.57 | |
| Closing paragraph | Analysts are bullish on growth ahead amid easing supply-chain pressures as well as an overall improvement in economic conditions. | |||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position |
THRM - Profit Take (Close the Position) |
FCX - BUY (Continue to hold) |
APA - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 56.6 | 39.71 | 37.88 |
| Current | 66.06 | 43.75 | 40.24 |
| Movement | 16.1% | 10.2% | 6.2% |
| Summary text | We close the position early to reduce overall portfolio exposure. |
Price action reflecting symmetry remains of interest. The stock is trading above its 200-day simple moving average. Upside momentum provides further support.
Our profit target is $47 with a trailing stop-loss at $40.50. Exit the position around 18 October 2023. |
The stock price is trending toward the lower range of an inclining channel pattern, and this remains attractive. Trading continues to test the 200-day simple moving average. Upside momentum is still supportive.
Our profit target is $45 with a trailing stop-loss of $37.10. Exit the position around 27 September 2023. |
| Share Name and position |
ETSY - Buy (Continue to hold) |
IEX - BUY (Continue to hold) |
LHX - On watch (Continue to hold with strict trailing stop loss) |
|---|---|---|---|
| Entry | 93.07 | 212.62 | 194.10 |
| Current | 98.60 | 221.86 | 187.72 |
| Movement | 5.9% | 4.3% | -3.3% |
| Summary text |
The stock continues to display a broadening bottom pattern. Trading continues below the 200-day simple moving average, however, there is still strong upside momentum.
Our profit target is $115 with a trailing stop-loss of $89.30. Exit the position around 3 November 2023. |
The stock price remains above key support levels. Trade has crossed above the 200-day simple moving average. Upside momentum further supports our bullish stance.
Our profit target is $240 with a trailing stop-loss of $212. Exit the position around 20 October 2023. |
A price that bounced off major support remains of interest. Upside price momentum remains halted, which is a concern.
Our profit target remains set at $215.00. We strongly suggest a strict trailing stop-loss at $186.00. We plan to exit the position around 8 September 2023. |
