Sustainable Materials Deal With Loop Might Change The Case For Investing In NIKE (NKE)

• Loop Industries recently announced a multi-year supply agreement with NIKE for sustainable materials produced at its new manufacturing facility in India, making NIKE the site’s primary customer and supporting the company’s sustainability goals.
• This collaboration underscores NIKE’s efforts to reduce the use of traditional polyester, signaling a move toward more environmentally friendly product offerings and potentially strengthening its brand appeal among eco-conscious consumers.
• We’ll explore how the sustainable materials partnership could influence NIKE’s growth outlook and reinforce its innovation narrative.

These 13 companies survived and thrived after COVID and have the right ingredients to survive Trump's tariffs. Discover why before your portfolio feels the trade war pinch.

NIKE Investment Narrative Recap

To be a NIKE shareholder today, you need to believe in the company’s ability to reignite growth through innovation, marketing, and brand strength, even as it faces short-term pressure from falling earnings and intense competition. The partnership with Loop Industries for sustainable materials is unlikely to materially shift the most immediate catalyst, margin recovery, nor does it significantly change the major risk of ongoing revenue contraction in key markets right now.

Among recent announcements, NIKE’s latest earnings report is most relevant in this context, with net income declining to US$727 million in the first quarter of fiscal 2026. This aligns with ongoing concerns about earnings pressure, emphasizing the importance of cost control and margin improvement, while environmental initiatives like the Loop partnership may support long-term branding but do not offset near-term financial strain.

By contrast, there’s a critical risk that investors should be aware of: continued double-digit declines in digital sales and core brands could…

Read the full narrative on NIKE (it's free!)

NIKE's narrative projects $50.7 billion revenue and $4.4 billion earnings by 2028. This requires 3.1% yearly revenue growth and a $1.2 billion earnings increase from $3.2 billion today.

Uncover how NIKE's forecasts yield a $83.27 fair value, a 37% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community’s 41 fair value estimates for NIKE range from US$58.49 to US$96.60 per share, showing opinions can vary widely. Persistent revenue declines, particularly in digital and Nike Sportswear sales, remain a key challenge influencing future company performance and invite you to consider several alternative viewpoints.

Explore 41 other fair value estimates on NIKE - why the stock might be worth just $58.49!

Build Your Own NIKE Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your NIKE research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free NIKE research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate NIKE's overall financial health at a glance.

Ready For A Different Approach?

Right now could be the best entry point. These picks are fresh from our daily scans. Don't delay:

• Trump's oil boom is here - pipelines are primed to profit. Discover the 22 US stocks riding the wave.
• The end of cancer? These 29 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.
• Outshine the giants: these 24 early-stage AI stocks could fund your retirement.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com