Companies and Brands

The 2016 Bullish and Bearish Case for Nike

Chris Lange

Published: January 7, 2016 11:50 am

Last Updated: January 13, 2020 3:19 pm

Nike Inc. (NYSE: NKE) absolutely exploded out of the gate in 2015. It is already the world’s leading designer, marketer and distributor of athletic footwear, apparel and equipment. To top this off, Nike was also the top-performing Dow component in 2015. The question is whether this company can have a repeat performance in 2016.

Now that 2015 has ended, 24/7 Wall St. is taking a closer look to what the strategists and analysts on Wall Street expect for the stock market in 2016. As we all know, the bull market was interrupted in 2015, and the Dow Jones Industrial Average closed out the year down 2.2% to 17,425.03. That may be hardly a reason to call a bear market ahead, but it follows six straight years of gains.

While the index performance of the Dow does not account for individual stock dividends, Nike closed out 2015 at $62.50, as the top Dow performing stock, with a gain of 31.4%, including its dividend adjustments.

For the year ahead, the consensus analyst price target from Thomson Reuters is $72.56. If the analysts are correct, the expected total return for Nike would be 18.2%, if you include its dividend yield of 2.1%.

This year has gotten off to a very bumpy start, and Nike shares were trading at $61.06 just a few days into the year.

In the broad sense, Nike benefits from consumer preferences for “athleisure.” With the company’s extensive product line and recognizable worldwide branding, the stock continues to roll year after year. Driven by its digital business as well as inline and factory stores, the company now anticipates achieving $16 billion in revenue by the end of fiscal year 2020.

24/7 Wall St.
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