As per the UBS analysts, the price of Nike's stock will double as long as the company manages to reach its margin and long-term sales targets. Keeping in view the fundamentals of the Nike company, the UBS analysts have set a $150 price target for the stock.
UBS also added that the margin targets and the sales target over the long term are very achievable given the history of Nike.
Nike's EPS To Reach $6.50
If Nike manages to reach its targets in the Financial year 2026, it would mean an EPS of $6.50 at the very minimum. In simple words, that's twice the $3.23 EPS of Nike posted in the financial year 2023.
So as long as the stick manages to hold its profit/earning ratio, then the chances of the stock value doubling in the near term will increase manifolds.
UBS analysts said that the scenario of Nike doubling its stock price is very reasonable even when the global macro slowdown is considered. They also added that the risk/reward ratio offered by Nike is very attractive despite the fact that it is currently at a P/E of 29x.
As for when Nike's stock will climb higher, UBS said that it is closely tied to margin improvement and sales growth. So as soon as the market starts to see the trends going in that direction, the stock will start to move higher. At the very least, the September Q1 earnings of Nike will likely be the flashpoint for this bull run in the stock's price.
If we look at Nike's financial numbers, they are solid despite the global consumption slowdown. This is an indication that Nike continues to enjoy its dominant position in its respective markets!
Looking ahead, the month of September will be important for both Nike and its investors. If the actual data turns out to be better than expected, a new bull run will start!