Latest news with #athleticfootwear
Yahoo
26-05-2025
- Business
- Yahoo
Jefferies Highlights Nike's (NKE) Strong Position, Maintains Buy Rating
On Friday, May 23, Jefferies analyst Randal Konik maintained a 'Buy' rating on NIKE, Inc. (NYSE:NKE) with a price target of $115. Konik's decision comes after he noticed that HOKA, a competitor in the athletic footwear market, is showing signs of slowing sales growth. The analyst noted that HOKA's year-over-year sales growth dropped to 10% in the fourth fiscal quarter, down from 24% in the third fiscal quarter and 35% in the second fiscal quarter. A team of trainers and athletes displaying a wide range of athletic and casual footwear. Konik believes that NIKE, Inc. (NYSE:NKE) is positioned to gain market share because it is focused on innovation and bringing back wholesale channels. One example is the company's partnership with Amazon. Even though NKE is trading near a 15-year low when measured by enterprise value-to-sales, the analyst still recommends buying the shares. He highlighted NIKE, Inc.'s (NYSE:NKE) global brand and leadership in athletic footwear as key reasons. Additionally, the analyst pointed out that competition in the sneaker market is restricted and often underestimated. NIKE, Inc. (NYSE:NKE) has a large total addressable market because it offers products at diverse price points, which appeal to a wide range of consumers. While we acknowledge the potential of NKE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NKE and that has a 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: 11 Stocks That Will Bounce Back According To Analysts and 11 Best Stocks Under $15 to Buy According to Hedge Funds. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17-05-2025
- Business
- Yahoo
Does Dick's $2.4B Foot Locker Buyout Justify a Buy Decision Today?
DICK'S Sporting Goods, Inc. DKS is acquiring another big athletic footwear retailer Foot Locker, Inc. FL. Will this impact Dick's Sporting Goods' focus and business alignment? Should you consider buying DKS stock now? Let's find out – Dick's Sporting Goods, recently, decided to acquire Foot Locker for almost $2.4 billion. In the buyout deal, Foot Locker shareholders may receive $24 in cash or 0.1168 shares of Dick's common stock in place of each share held. The cash offer is 66% higher than Foot Locker's 60-day average price. Dick's Sporting Goods plans to finance the deal through a combination of new debt and cash. Both parties expect the transactions to be completed by mid-2025. The acquisition is expected to boost earnings per share (EPS) in the first full fiscal year after closing and generate $100-125 million in cost synergies in the medium term, added Dick's Sporting Goods. Dick's Sporting Goods chairman Ed Stack stated that the merger would enable both athletic footwear retailers to unlock growth and strengthen their position among shoe enthusiasts. The acquisition of Foot Locker would consolidate Dick's Sporting Goods' market position in the footwear industry, providing the company with the capability to perform on a larger scale. Lest we forget, Foot Locker had around 2,400 stores in 26 countries by the end of last year. Dick's Sporting Goods agreed to buy Foot Locker at a high price, causing Foot Locker's shares to soar 85% on Thursday, its largest increase ever. And why not? Foot Locker received a significant payout, a silver lining for the company whose shares had plummeted 70% since reaching a high of $79.20 on Dec. 8, 2016. Over the last three fiscal years, Foot Locker's revenue growth was lackluster, with earnings falling from $7.77 in fiscal January 2022 to $1.37 by the end of January this year. Foot Locker's market share is also shrinking. And these challenges unnerved Dick's Sporting Goods investors, causing a 14.6% drop in DKS share price on Thursday. While Dick's Sporting Goods has increased market share, improved profitability, and thrived in a tariff environment, acquiring a struggling retailer has dampened investor enthusiasm. Understandably, Dick's plans to expand its footwear business, which made up 28% of total sales in fiscal 2024. But acquiring a stressed company at a high price has fueled doubts about Dick's Sporting Goods' future. It may decrease the return on capital and heighten balance sheet risk for the company. Investors are feeling uneasy about Dick's Sporting Goods' beaten-down Foot Locker acquisition amid uncertain macroeconomic conditions and elevated selling, general, and administrative expenses. Therefore, new entrants should avoid betting on Dick's Sporting Goods stock for now. However, existing stakeholders may consider holding onto it as there are potential growth opportunities if management gets the synergy right. Dick's Sporting Goods, anyhow, is seeing strong top-line growth, increase in comparable store sales, and transaction growth. For now, Dick's Sporting Goods has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Foot Locker, Inc. (FL) : Free Stock Analysis Report DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
