- Nike has had a resilient year, up over 30% YTD, where major indices are down.
- Nike has strong fundamentals to back its valuations, and the stock is poised to gain further.
- Nike stock is likely to find support from improving sales and profitability, driven by major sporting events coming up in the coming quarters.
In John’s opinion, Nike (NYSE:NKE) is a good example of a company that’s successful. One that has solid fundamentals to back its valuations. Possibly one of the reasons why Nike has sustained a good year so far, remaining up over 30% in the year to date, in a bear market where indices and stocks have lost significant value.
What’s more, John thinks that Nike is poised for further growth in the coming quarters. Nike’s stock has done well lately, partly due their ability to consistently beat analyst expectations, like they did again latest quarter. As for the coming quarters, there are a number of triggers that could drive the company’s stock higher. The coming months are packed with sporting events like the NBA season, the NFL season, all scheduled for the winter months.
Further, historically, Nike’s stock price has seen double digit growth in Olympic years, the next of which happens to be 2016. Given that the global sporting events scheduled for later this year and 2016, there’s a strong possibility that Nike products, like shoes, accessories, jerseys and more, could find healthy demand.
Nike is performing well in spite of the fact that competitors like Under Armour (NYSE:UA) have garnered strong growth, and Nike valuations aren't too steep either. Nike is poised to deliver close to $33 billion in revenue in 2016, and the stock currently trades at 30 times 2016 earnings estimates. Poised for a strong period of growth, Nike looks like an option worth considering for investors who are keen to get a hold of companies with strong fundamentals.