Stock Analysis & Valuation NIKE, Inc. (NKE.DE)

• Previous Close: €51.95
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	42.80	-18
Intrinsic value (DCF)	26.61	-49
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

NIKE, Inc. (NKE.DE) is a global leader in athletic footwear, apparel, equipment, and accessories, headquartered in Beaverton, Oregon. Operating in the consumer cyclical sector, NIKE dominates the apparel and footwear industry with iconic brands like Nike, Converse, and Jordan (Jumpman). The company designs, markets, and sells performance and lifestyle products across men's, women's, and kids' categories. NIKE's diversified distribution includes direct-to-consumer channels (NIKE-owned stores and digital platforms), wholesale partnerships, and licensing agreements. With a strong brand identity and innovative product pipeline, NIKE maintains a competitive edge through endorsements from elite athletes, sustainability initiatives (such as its Move to Zero campaign), and cutting-edge technology like Air cushioning and Flyknit. The company's global footprint spans North America, EMEA, Asia-Pacific, and Latin America, reinforcing its position as a market leader in sportswear.

Investment Summary

NIKE presents a compelling investment case due to its strong brand equity, global market leadership, and robust direct-to-consumer growth. The company's FY 2024 revenue of €51.36 billion and net income of €5.7 billion reflect its pricing power and operational efficiency. However, risks include exposure to macroeconomic headwinds (currency fluctuations, inflationary pressures), intense competition from Adidas and emerging brands, and supply chain vulnerabilities. NIKE's beta of 1.234 indicates higher volatility than the market, but its consistent dividend (€1.47 per share) and strong cash flow (€7.43 billion operating cash flow) provide stability. Investors should monitor the company's ability to sustain innovation and digital sales growth amid shifting consumer preferences.

Competitive Analysis

NIKE's competitive advantage stems from its brand strength, innovation pipeline, and global distribution network. The company leads in athletic footwear with a ~18% global market share, outpacing Adidas (~11%) and Puma (~5%). Its direct-to-consumer (DTC) strategy, contributing ~42% of revenue, enhances margins and customer engagement. NIKE's sponsorship portfolio (featuring athletes like LeBron James and Serena Williams) reinforces its premium positioning. However, competition is intensifying: Adidas excels in soccer and sustainability, while Lululemon and On Holding are gaining share in performance apparel and running shoes, respectively. NIKE's scale allows for R&D investments (e.g., Vaporfly running shoes), but smaller rivals like Hoka (Deckers) are disrupting niche segments. Supply chain diversification (Vietnam, Indonesia) mitigates risks, but reliance on wholesale partners like Foot Locker remains a vulnerability. The company's 'Consumer Direct Acceleration' strategy focuses on digital growth (Nike App, SNKRS) to counter e-commerce rivals.

Major Competitors

• Adidas AG (ADS.DE): Adidas is NIKE's closest competitor, with strength in soccer (FIFA World Cup sponsor) and sustainability (Primegreen materials). Its Yeezy partnership (now dissolved) previously drove hype, but supply chain missteps in 2022-23 hurt profitability. Adidas lags in North America (~21% revenue vs. NIKE's ~40%) but leads in Europe. Innovation (Boost cushioning) and collaborations (Beyoncé, Gucci) are key differentiators.
• Puma SE (PUM.DE): Puma focuses on lifestyle-performance hybrids (e.g., Fenty x Puma) and motorsports (Ferrari partnership). It’s smaller than NIKE (€8.5B revenue vs. €51.4B) but grows faster in Asia. Weaknesses include limited basketball presence and lower DTC penetration (~35% revenue). Strengths include agility in trends and lower price points.
• Lululemon Athletica Inc. (LULU): Lululemon threatens NIKE in premium athletic apparel (yoga, running) with higher margins (~58% gross margin vs. NIKE's ~44%). Its community-driven retail (e.g., sweat classes) and Mirror acquisition bolster engagement. Weaknesses include limited footwear offerings and geographic concentration (80% revenue from North America).
• On Holding AG (ONON): On disrupts the running segment with CloudTec cushioning and endorsements (Roger Federer). Its DTC model (36% revenue) and sustainability focus (Cyclon subscription) resonate with millennials. However, it lacks NIKE's scale (€1.8B revenue) and struggles in basketball/team sports.
• Skechers USA Inc. (SKX): Skechers competes in value-focused casual and performance footwear. Its strength lies in comfort technology (Arch Fit) and wholesale partnerships (Costco). Weaknesses include weaker brand prestige vs. NIKE and reliance on aging demographics (55% revenue from North America).
• Deckers Outdoor Corporation (DECK): Deckers’ Hoka brand challenges NIKE in running with maximalist shoes (e.g., Bondi). UGG diversifies into casualwear. Hoka’s 58% growth (FY23) outpaces NIKE, but Deckers lacks global infrastructure (~70% revenue from North America).