Nike Stock Shows Signs of Recovery Amid Undervaluation and Technical Signals, Analysts Recommend 'Buy'

Technical Analysis

NIKE, Inc. (NKE) closed at $57.25 on April 4, 2025, reflecting a 3.00% increase on the last trading day. Currently, it trades near its 52-week low of $52.50, indicating a significant downtrend from its 52-week high of $98.04. The high relative volume at 67.66 million compared to the average of 16.90 million suggests a recent surge in trading interest. The RSI14 at 15 denotes deep oversold conditions, typically indicative of a potential rebound. However, the MACD remains negative, and the 50-day ($72.96) and 200-day ($77.24) moving averages show downtrends, suggesting weak momentum. The immediate support level is at $55.58, with resistance at $67.39.

Fundamental Analysis

Nike's market capitalization of $84.50 billion and a P/E ratio of 19.02 position it as a stable and relatively undervalued stock, particularly considering its historical valuation. The EPS of 3.01 underscores strong earnings, although recent economic factors like inflation and tariffs have impacted profitability. A dividend yield of 2.69% (TTM) offers a modest income opportunity. The intrinsic value, calculated via DCF, is estimated at $92.22, considerably higher than the current trading price, suggesting undervaluation. Despite current challenges, the company's robust global presence and strategic adaptability provide long-term growth potential.

Short-term Performance Prediction

In light of recent news highlighting upgraded ratings and a rebound in trading action following negotiations affecting tariffs, NKE might experience slight upward movements in the next trading day. The oversold RSI condition supports a possible short-term recovery. However, continued volatility in the global markets could hinder significant gains over the upcoming week. The stock's trajectory could be positively influenced by improving trade negotiations with Vietnam, potentially easing supply chain pressures.

Long-term Investment Potential

Nike remains a leader in the apparel and footwear industry with innovative brand strength and a global footprint. Tariff impacts and inflation are pressing short-term concerns, but Nike's long-term strategy involves production adjustments and market adaptation, strengthening its competitive edge. Analysts' consensus target of $86.75 reflects confidence in future appreciation, while the lack of 'sell' recommendations further signals optimistic long-term prospects. As a fundamentally strong company trading well below its intrinsic value, Nike is well-positioned for recovery as economic conditions stabilize.

Overall Evaluation

Given the current analysis, NIKE, Inc. can be categorized as a 'Buy' candidate. This classification arises from the stock's substantial undervaluation compared to its intrinsic value, supportive long-term business strategies, and potential short-term recovery indicated by recent technical signals and news updates. Although macroeconomic headwinds persist, Nike's brand resilience and market adaptability denote significant potential for future appreciation.