Investors who have held stocks over the past year have generally seen strong gains. In fact, the SPDR S&P 500 TO SPY the total return over the last 12 months is 33.1%. But there’s no doubt that some big-name stocks have performed better than others along the way.
Nike’s bumpy road: A company that has made a solid investment in the last year is a sportswear company Nike Inc. NKE.
Fortunately for Nike investors, the company’s online retail business has been relatively isolated from the COVID-19 pandemic. Unfortunately, Nike had to deal with supply chain disruptions which negatively impacted sales.
Nike’s fiscal 2021 revenue rose 19% to $44.5 billion, while net profit jumped 125.5% to $5.7 billion. In June, Nike reported online sales growth of 41% in the fiscal fourth quarter and online sales growth of 147% from pre-pandemic levels in 2019.
At the start of 2020, Nike shares were trading at $101.36. By early March, the stock had fallen to $89.60 as news of the spread of the coronavirus in China sparked concerns of a US pandemic.
Nike finally hit a low of $60 in March’s pandemic-driven selloff. Fortunately for Nike investors, the decline didn’t last long.
By September, Nike shares were back to new all-time highs above $110, and the stock reached $147.95 in December 2020.
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Nike In 2021, beyond: Nike traded as high as $146.66 in March 2021 before falling back to $125.44 in the months that followed. Luckily for Nike investors, the company’s fiscal fourth quarter earnings report in June was a home run.
Nike reported record earnings, revenue and guidance as well as record revenue in North America during the quarter. The stock initially jumped more than 13% following the report, hitting a new all-time high of $174.38 in August. The stock has since cooled to around $155.50.
Still, Nike investors who bought a year ago and held have generated a solid return on investment. In fact, $1,000 worth of Nike stock purchased on September 21, 2020 would be worth about $1,357 today, assuming dividends reinvested.
Looking ahead, analysts expect Nike to return to new all-time highs over the next 12 months. The average price target among the 26 analysts covering the stock is $185, suggesting an 18.9% upside from current levels.