NIKE

Analysis of Nike share price

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In the field of stock market investing, there are big names that attract traders a lot because the brand they represent is synonymous with fame and popularity. This is particularly the case of the Nike company whose securities are accessible for trading on the stock market. Let's find out together how to carry out analyzes of the course of this stock by reading some essential information about this group, but also a historical analysis of its prices over the last ten years.

Elements that can influence the price of this asset:

Analysis N°1

We would principally monitor all the actions completed by Nike with the objective of gradually widening its range from a particular shoe sector, particularly in developing its range of fashion clothing and accessories.

Analysis N°2

We would also monitor the group’s international expansion strategy, particularly the implantation of its brand in the emerging countries such as China or India that represent a favoured consumer target ripe for exploitation. This could include worldwide events where the brand is represented and which could provide excellent publicity for the group.

Analysis N°3

The foreign exchange market is also a significant element to monitor when trading in Nike shares. In fact, given that this company manufactures in different countries and also sells in numerous countries, its margins and costs can be directly impacted by the foreign exchange rates. Advantageous or disadvantageous these Forex rates can boost the company’s profits or, on the contrary, reduce them even to the point of forcing sales at a loss.   

Analysis N°4

Nike’s competitors, who have used its economic policy to produce quality products at a lower price for themselves, also present a threat that needs to be monitored due to movements in the market share of each of the major companies in this sector.

Analysis N°5

Finally, the pricing policy pursued by Nike and its retailers should also be monitored due to the high volatility of the market and the instability of the consumers purchasing power.

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General presentation of Nike

The American company Nike is a specialist in the design, manufacture and sale of sports footwear, goods and equipment. It owns the Nike, Cole Haan, Bragano, Converse All Star and Hurley brands. However, its activity can be divided into different areas according to the turnover generated:

  • Footwear sales
  • Sale of clothing
  • Sale of sports equipment

With a vast network of more than a thousand shops around the world, mainly in the United States, Nike also distributes its products through independent distributors and on the Internet.

Most of its sales are in North America and Europe, but Nike also reaches the Asian market and the rest of the world.

Nike’s share price is currently listed on the US NYSE market in the united states and is part of the Dow Jones stock index.

Analysis of Nike share price
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The major competitors of Nike

In order to understand how the Nike Group is able to progress in terms of growth, it is of course important to know its sectoral environment and in particular who its main competitors are in its main sector of activity, which is that of sports goods and footwear.

Puma

Of course, the German Puma Group is one of Nike's main competitors at the moment. It is a company specialised in the production of sports goods that was founded in 1948 and is based in Bavaria. Until 2018, the company was also a subsidiary of the French group Kering. The company has made its brand known in more than 120 countries around the world and has become the third largest sports equipment manufacturer in the world. Among the products marketed by the Puma Group are of course shoes, which represent the largest part of the group's turnover, as well as clothing and accessories.

Adidas

Another group that is important to consider when analysing the Nike share is the German Adidas Group, which was founded in 1949. The company specialises in the manufacture of sports goods. Known as the brand with three stripes after its logo, Adidas has long been a pioneer and leader in sports equipment and is therefore one of the best known sports equipment manufacturers in the world. Adidas markets a wide range of products online and through shops worldwide, including footwear, sportswear, sportswear and sports equipment.

Under Armour

Finally, the Under Armour group is an American clothing company that was founded in 1996 by a former American professional footballer. The company is particularly known for its production of Rugby jerseys or basketball shoes.


The major partners of Nike

Find out more about Nike’s main partnerships over the recent years.

Philips

In 2003, Nike established a partnership with Philips electronics in order to develop audio sport products such as a portable MP3 player as well as portable cd players and wireless headphones.

Apple

In 2006, Nike signed a partnership with Apple in order to create the Nike+ iPod whose production was finally be stopped quickly because of a lack of success.

Adidas

In 2014, Nike even joined one of its main competitors, Adidas, in order to produce shirts for the French football team, which were in shortage in the official stores. Nike therefore had to call Adidas to supply stores quickly by increasing the production of the jerseys.

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The factors in favour of a rise in the Nike share price:

Like any serious investor you undoubtedly search for the elements that can assist you in identifying and implementing your long term trading strategy on the Nike share price. And of course the best way to anticipate basic trends of this asset on the stock market is to compare the strengths and weaknesses of the company to learn how it will react in the future. Here therefore to assist you is a summary of the advantages of this group and its shares on the stock market. We will of course also examine the major disadvantages and weak points of this company later in this article.

Firstly, concerning the principal advantages of the Nike Group we can of course cite the high competitive level of this company. In fact, the Nike Group pursues a very aggressive policy in this aspect and displays a real aversion towards its major competitors. This strategy that aims at directly attacking the competitive brands has already borne fruit over the last few decades and should continue to enable the group to gain new clients.

Another undeniable advantage of the Nike Group is related this time to the production chain as this company does not possess a factory. It therefore invests very little in buildings or recruitment and training of a workforce which enables it to make major savings and promotes a lighter, less complex organisation than that of other major groups in this sector. In fact Nike prefers to invest in research and development and offers innovative and evolutionary products by then producing these new items where it wishes to do so and at very low prices too. Nike therefore benefits from a great negotiating strength regarding its manufacturers and is constantly seeking ways to minimise production costs, never hesitating to regularly move the production of its items from one sub-contractor to another.

Finally, the last strong point of Nike on which we can count concerns of course the global aspect of this renowned brand that is recognised worldwide as the number one sporting brand on an international level. The brand logo has also been easily identifiable by everyone for a long time now.

The factors in favour of a drop in the Nike share price:

After summarising the major strong points of the Nike company and therefore the probable advantages of its stock market share price it is our duty to also remind you of the disadvantages and weak points of this group so you are able to moderate your judgement before implementing your trading strategy over the medium or long term on this asset. Here therefore is a summary of this company’s weak points that could negatively impact the share price.

Firstly, if we take into account the extent of the range of products developed and sold by the Nike Group we can also note that, by looking closely at the sales distributions by sectors, that the company’s revenue remains strongly dependent on the sports shoe sector. Therefore, the slightest loss in the market share in this sector or a major change in consumer behaviour or habits can represent a major risk for the group and its profitability.

Finally, the second and last weak point of the Nike company concerns its strong dependence on its retailers. In fact, the Nike Group only has a few distribution points it owns worldwide and mainly relies on its third party resellers for product distribution. As the retail sales sector is highly sensitive to price changes the retailers therefore try to pass on lower market prices through Nike products which reduces their margins. They therefore have a way of applying pressure on the group.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

How to follow the Nike share price in real time?

If you wish to follow the Nike share price in real time on the stock markets then you can find this on the group’s official website in the section reserved for investors. However you will find stock market charts that are more suitable for trading activities available for you to use on the CFD trading platforms. These charts in fact offer the advantage of a custom display therefore the possibility of displaying different trend and volatility indicators of your choice for your technical analyses.        

Who are the largest shareholders in the Nike Group?

Nike Group's capital is divided between free float and capital held by large individual and private shareholders, including Oak Hill Investment Management with 8.14% of the shares, The Vanguard Group with 7.9% of the shares, SSgA Funds Management Inc with 4. 69% of the shares, Philip Knight with 2.84% of the shares, BlackRock Fund Advisors with 2.45% of the shares, Fidelity Management & Research Co with 2.27%, Wellington Management Company with 1.67%, Northern Trust Investments Inc with 1.6% of the shares, Lone Pine Capital with 1.53% and Geode Capital Management LLC with 1.48%.

Which strategy should you implement for trading in Nike shares?

The choice of the strategy to use when trading in Nike shares depends greatly on your aspirations as a trader. Regarding the high volatility and liquidity of this asset, strategies over the short, medium and long term are all possible and you therefore have a choice available to you as to the method you wish to use for your investment.

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The content in question is provided for information purposes only and should not be considered as investment advice. Past performance is no guarantee of future results. The trading history is less than 5 years old and may not be sufficient to serve as a basis for an investment decision.

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