Jefferies: Time To Buy Nike
In a report published Thursday, Jefferies analysts initiated coverage of Nike Inc (NYSE: NKE) with a Buy rating and a price target of $120, saying that the stock represents "a solid long-term play for investors seeking large-cap growth with mid-teens% total return potential and a call option for accelerated shareholder friendly moves."
In the report Jefferies noted the reasons for the Buy rating as:
- Innovation leadership and category dominance in an athletic industry with secular tailwinds - Nike's global futures orders rose 11 percent in 3Q despite difficult comps
- Growth catalysts across geographies - like China and other emerging markets - and sub-categories - like women’s, apparel, DTC and Converse
- Gross margin expansion beyond prior peaks - This is likely to be driven by pricing power, manufacturing efficiencies and mix shift toward higher margin international and DTC
"Our survey work reveals a continued strong preference for Nike, despite mounting competition, with 47% of respondents choosing Nike as their favorite athletic brand vs 9% and 8% for UA and Adidas, respectively. NKE was also the top choice for both footwear (40% vs 2nd place Adidas at 9%) and apparel (29% vs 2nd place UA at 18%)," the analysts said.
Latest Ratings for NKE
|Oct 2016||Oppenheimer||Initiates Coverage On||Perform|
|Oct 2016||Susquehanna||Initiates Coverage On||Positive|
|Sep 2016||Guggenheim||Initiates Coverage on||Buy|
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