Does Nike buy or sell in December?

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  • Nike has raised its price target for Morgan Stanley to $152
    Nike has approved a quarterly dividend of $0.275 per share, an increase of 12.2% over the previous dividend.
    The current risk/reward ratio is not good for long-term investors

    The shares of Nike (NYSE: NKE) have risen from USD 121 to USD 138 since the beginning of November, and the current price is USD 135. This stock has been one of the biggest winners in the market in recent months, but the current risk/reward ratio is not good for long-term investors.

    Fundamental analysis: Nike has declared a quarterly dividend of $0.275/share

    Nike shares continue to trade in a bull market, and for the time being there is no signal for a turnaround. Even with the COVID 19 pandemic, sales of Nike products are doing well and it is important to note that Morgan Stanley has raised its target price for Nike to $152.

     

     

     

    “We believe that NKE is in the early stages of the transition from a traditional wholesale business to a digitally managed, consumer-facing brand. Covid-19 has enabled NKE to further accelerate its DTC strategy and make it a major apparel and footwear company,” said analyst Kimberly Greenberger.

    Nike has declared a quarterly dividend of $0.275 per share, up 12.2% from the previous dividend of $0.245. It is important to note that the company will pay a dividend on December 29, while the ex-dividend day will be December 04.

    Technically, the Nike share could reach the price target of $152 this December, but with a market capitalization of $211 billion, I think the share is overvalued.

    There are also some obvious risks involved in trading Nike stock (NYSE: NKE), and the company announced that it will reduce its workforce by ~700 employees in response to the ongoing effects of the pandemic. The risk/reward ratio is not good for long-term investors and the correction in the U.S. stock market may be imminent.

    Technical analysis: Share price near record levels

    Nike’s valuation is currently approaching an all-time high, and as long as the price remains above $120, the stock remains in the “buy” range.

    Data source: tradingview.com

    The current support levels are $130 and $120, $135 and $140 represent the resistance levels. If the price jumps above the resistance at $140, the next target could be $150, but if the price drops below $120, this would be a clear “sell” signal and perhaps a sign of trend reversal.

    Summary

    Nike stocks have risen from $60 to $138 in less than a few months and so far there is no sign of a bullish reversal. Nike has declared a quarterly dividend of $0.275 per share, up 12.2% from the previous dividend of $0.245. Some analysts say that Nike is still undervalued compared to the market, but with a market capitalization of $211 billion, I think this stock is expensive. Nike’s valuation is currently near an all-time high, but if the price falls below $120, it would be a strong “sell” signal and perhaps a sign of a turnaround.

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