Nike Holds On as Dow’s Top-Performing Stock
July 7, 2018 by Paul AusickAthletic gear maker Nike Inc. (NYSE: NKE) not only held on to its place at the top of the Dow heap for the year to date, the company’s stock also gained 6.7% in the short week. That’s on top of an 8.5% gain in the prior week. For the year to date, Nike stock is up 22.3%.
The second-best performer among the Dow Jones industrials so far this year is Microsoft Corp. (NASDAQ: MSFT), which is up 15.28%. That is followed by Visa Inc. (NYSE: V), up 18.3%, UnitedHealthGroup Inc. (NYSE: UNH), up 13.7%, and Boeing Co. (NYSE: BA), up 13.5%. Of the 30 Dow stocks, only 11 have managed to post a gain to date in 2018.
The Dow experienced modestly successful week, adding about 185 points over the course of the past week to close at 24,456.48, up about 0.8% from the previous Friday’s close. The Dow closed up less than 1% for the second quarter but down 1.8% for the first six months of 2018.
Nike has been trading solidly higher after beating earnings and announcing a large stock buyback plan. Analysts have also weighed in with some price target increases that have helped push the share price up. Wedbush Securities maintained an Outperform rating and raised its target price from $82 to $85. Credit Suisse reiterated its Outperform rating and raised its target from $78 to $90, while Deutsche Bank reiterated its Buy rating and lifted its target price to $87 from $84.
The company is also expected to benefit from its sponsorships of the Brazilian, French, Croatian and English World Cup soccer teams. France beat Brazil on Friday, but England plays Belgium and Croatia plays Russia Saturday for the remaining two spots in the semifinals. While most fan gear is sold ahead of the tournament, the winner or an unexpected high finisher (we’re looking at you, England) can result in a late sales boost.
Nike’s shares jumped to an all-time high of $81.00 in the prior week and closed Friday at $77.08. The 52-week low is $50.35. The consensus 12-month price target on the stock is $81.02, and the forward price-to-earnings ratio is 24.51.
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