) is the largest global manufacturer of athletic footwear, apparel
and equipment by sales volume, and competes with Sketchers (
), Adidas AG (
), Steven Madden (
) and K-Swiss (
) in the global footwear market. It sells its products under
several brands including Nike, Nike Golf, Converse, Cole Haan,
Umbro, and Hurley.
We maintain a
$77.52 price estimate for Nike's stock
, roughly 13% below market price.
Strong Brand, Growing Market Share
Nike's global footwear market share has grown steadily over the
years - from roughly 14% in 2005 to 17% in 2010. The growth is
mainly attributable to Nike's continuous evolution of its product
line and marketing initiatives targeting budding athletes at the
college level and below. All this, of course, is in addition to its
extensive market of casual sports fans.
In addition to its strong brand name and large distribution
channel, Nike's expansion opportunities, innovative product
development, and marketing strategies should contribute towards
growth in its footwear market share. We anticipate that Nike's
footwear market share will climb steadily over the years ahead,
crossing 20% by the end of our forecast period.
Nike has tremendous expansion opportunities in emerging markets
like India and China, which could potentially offset recent
weakness in the U.S. (See
Nike's Commodity Costs Rising, but Expansion
Opportunities Could Lift Stock
Opportunity Lies Ahead for Nike in India
The company also has a strong R&D division that manages to
continually update and evolve its product lines. For example, Nike
previously collaborated with Apple to create a footwear product
that tracks a runner's distance and speed, and communicates the
information to the person's iPod.
Nike also organizes and sponsors a variety of sporting events
(like soccer and basketball) at the U.S. college level. The events
attract athletes to Nike products and can potentially establish
product loyalty among both the players and fans.
Considering the importance of the footwear business to Nike, we
pose the following question:
What is Nike Footwear's Contribution to Nike's Overall
Click a response above to see the answer
See our full analysis and $77.52 price estimate