Footwear maker Nike (NKE) has renewed a 12-year-long partnership with the National Basketball Association (NBA) and the Women’s National Basketball Association (WNBA) under its new CEO Elliot Hill’s reign. Hill is trying to turn around the struggling sports apparel and footwear maker. Under the new partnership, Nike will be the exclusive uniform, apparel, merchandise, marketing, and content partner for the leagues.
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Details of the Nike-NBA Deal
As part of the deal, Nike will extend its rights for the next 12 seasons as the official designer and manufacturer of NBA, WNBA, and G League uniforms and other apparel and merchandise. The company said that the extension proves its commitment to expand and improve the basketball sport. Hill stated that Nike’s expansive global footprint will help grow the game’s fan base and open new opportunities for both players and fans.
As per reports, Nike’s extended deal could run well into billions of dollars. The company’s previous partnership, which began during the 2017-18 NBA season, was worth $1 billion, and this extended partnership is valued much higher than the prior tag. Nike has also been a brand ambassador for some of the biggest names in sports such as LeBron James, Kevin Durant, and Caitlin Clark.
Nike is also the official partner of the National Football League (NFL) and Major League Baseball (MLB). However, these deals are set to expire after the 2027 and 2029 seasons, respectively. Quality complaints and innovation challenges with the current uniforms have compelled both leagues to consider other potential bidders.
Insights from TipRanks’ Bulls Say, Bears Say Tool
Nike reported mixed results for the first quarter of Fiscal 2025 and also withdrew guidance for the full-year Fiscal 2025. The company has seen a slew of mixed reactions from bulls and bears following the CEO change and weak results.
According to TipRanks’ Bulls Say, Bears Say tool, some analysts are encouraged by Nike’s growing digital sales growth, experienced leadership under Hill, and potential meaningful partnership with e-commerce giant Amazon.com (AMZN).
On the other hand, bears are concerned about market share losses following Nike’s exit from retail partnerships and the declining sales in various segments.
Is Nike a Good Stock to Buy Right Now?
Wall Street remains divided on Nike stock owing to the multiple challenges it currently faces. Having said that, Nike has boosted its share buyback program to enhance shareholder rewards.
On TipRanks, NKE stock has a Moderate Buy consensus rating based on 14 Buy and Hold ratings each. Also, the average Nike price target of $92.19 implies 13.1% upside potential from current levels. Year-to-date, NKE stock has lost over 24% of its value.
