UPDATE: D.A. Davidson Reiterates On Nike Inc As F1Q Results Handily Exceed Consensus

In a report published Friday, D.A. Davidson analyst Andrew Burns reiterated a Neutral rating on

, and raised the price target from $85.00 to $96.00. In the report, D.A. Davidson noted, “NIKE reported revenue and EPS of $7.982 billion and $1.09, above consensus estimates of $7.775 billion and $0.88 and our estimates of $7.802 billion and $0.86. Constant currency (c.c.) revenue growth of 15% was driven by Western Europe (+25%), China (+20%), North America (+12%), Emerging Markets (+10%), and Central & Eastern Europe (+9%). DTC revenue grew 30% (c.c.). Gross margin expanded 169bp year-over-year (y/y) to 46.6% driven primarily by a mix shift to higher margin products, higher ASPs, and DTC growth, offset partially by higher product input costs. SG&A of $2.480 billion grew 21% y/y, driven by 23% demand creation growth (below initial guidance for 30% growth) and 19% overhead growth (DTC expansion and operational infrastructure investment). A 21.7% tax rate (favorable resolution of tax audits), benefitted the quarter by $0.05, relative to our 25% assumption.” Nike Inc closed on Thursday at $79.75.