10 Most Notable Analyst Reactions To Nike's Earnings

Nike Inc NKE reported Q4 EPS at $0.49 vs $0.48 estimates and sales of $8.2 billion vs. $8.28 billion estimates. Many analysts maintained their Outperform and Buy ratings while Morgan Stanley, Brean and Citi slashed price targets.

Here are the 10 most notable analysts reports on Nike.

Barclays maintained Overweight rating. Basketball remains healthy and pointed to strong demand from the recent launch of the KD9, which are already sold out, and the Kobe 11 iD shoes, which were the most successful iD launch in history.

JPMorgan maintained Overweight rating. While Nike sets up near-term as a 2H17 "show-me"story, four turns of multiple compression post-Q3 print creates an attractive multi-year entry point in their view with a low-to-mid-teens base case bottom-line profile equating to $3.00 in CY18 EPS power. 

Credit Suisse maintained Outperform rating. “This is the bad news that we had been expecting and we expect near-term pressure on shares as a result.”

Goldman Sachs reiterated Buy: "Revenue targets look achievable, valuation has compressed to 22X NTM P/E, and NKE is likely to be supported by a flight to quality against a volatile macro backdrop.”

DA Davidson reiterated Buy: The company has been able to shine through against the backdrop of a challenging environment due to “strong execution and operational discipline.” 

Brean Capital lowered their price target from $68 to $62, but maintained Buy rating. "Longer term, we believe continued focus on innovation (including Nike+ app, goes live in June) should continue to drive separation in the market, with a refocused ADS (launched biggest ever U.S. ad campaign in Feb.) and burgeoning UA (UA $37.52, Hold -Curry2, UA Record app) likely spurring NKE to push the innovation envelope even further, in our view."

Morgan Stanley maintained Equal-Weight: Nike's headwinds could be short-term in nature and the company will soon return to 10 percent top-line growth. On the other hand, Nike could be at an inflection point where competitors are now limiting its rate of market share gain.

UBS reiterated Buy with a price target of $70.

Citi slashed Nike’s target price from $75 to $61, maintaining a Buy. "At these levels, we think there are investors (based on recent calls) who will take advantage of a high quality global growth name, and we expect upside over the next 12mos from: an improved basketball platform, brand momentum on upcoming Olympics/Euro Champs, supply chain efficiencies, & higher share buybacks."

Jeffries maintained Buy: "While some moving P&L parts and market share oscillation is likely to pressure the stock and results through 1H17, we remain upbeat on the LT view, given the likelihood for improvement in N.A. over the year, coupled with healthy int’l bizs (esp. China, up 23% in 4Q), rapid DTC growth, and the benefits of manufacturing efficiencies now beginning to be realized."

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Posted In: Analyst ColorEarningsLong IdeasNewsGuidancePrice TargetReiterationAnalyst RatingsTrading Ideas
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