Last week, you might have seen that NIKE, Inc. (NYSE:NKE) released its third-quarter result to the market. The early response was not positive, with shares down 5.8% to US$93.86 in the past week. The result was positive overall - although revenues of US$12b were in line with what the analysts predicted, NIKE surprised by delivering a statutory profit of US$0.77 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, NIKE's 38 analysts are now forecasting revenues of US$53.4b in 2025. This would be a credible 3.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 18% to US$4.08. Before this earnings report, the analysts had been forecasting revenues of US$54.8b and earnings per share (EPS) of US$4.21 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
It'll come as no surprise then, to learn that the analysts have cut their price target 5.2% to US$115. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values NIKE at US$137 per share, while the most bearish prices it at US$75.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the NIKE's past performance and to peers in the same industry. We would highlight that NIKE's revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2025 being well below the historical 7.1% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.3% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than NIKE.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for NIKE. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple NIKE analysts - going out to 2026, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.