Nike Stock Price Hit All-Time High; More Upside is Ahead

Nike stock

Nike (NYSE: NKE) stock price hit an all-time high after presenting a robust outlook for fiscal 2020. It’s stronger than expected first-quarter results are adding to investors’ sentiments.

It is among the top-performing stocks in the Footwear & Accessories industry. Its shares soared 25% year to date to an all-time high of $94. Nike Stock price is up 80% in the past three years. The market pundits are expecting the extension of the bullish trend. This is because of a robust outlook.

NKE NIKE, Inc. weekly Stock Chart

Stronger Than Expected First Quarter Results

Nike has topped first-quarter revenue and earnings estimate by $230 million and $0.15 per share, respectively. Its consolidated revenue of $10.66 billion increased by 7% from the year-ago period.

North America’s revenue grew 3.6% while revenue growth from EMEA was at 6.4% from the previous year period. The revenue from Greater China jumped 22% year over year to $1.68B during the quarter. Footwear sales rose 8% and apparel sales were up 6%.

Our targeted strategic investments are accelerating NIKE’s digital transformation and extending our competitive advantage,” notes CFO Andy Campion on the quarter.

On top, the company’s strategy of investing in high margin products along with reducing the number of outstanding shares is working. Its earnings per share of $0.86 rose 28% from past year period. It has repurchased 11.9 million shares in the latest quarter.

Robust Outlook Supports the Bullish Trend

Nike stock price receives support from future fundamentals. It expects FY20 revenue to grow at a high single-digit rate, which is likely to exceed FY19 revenue growth of +7.5%. The company anticipates year over year gross margin improvement of 50 bps to 75 bps for this year. It also forecasts double-digit growth from Chinese markets despite trade war concerns.

Market pundits are showing confidence in its FY2020 outlook. Evercore ISI has raised the Nike stock price target to $150. Overall, sustainable growth in financial numbers is backing its share price performance. Thus, shares are poised to extend momentum in the coming quarters.

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.

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