Credit Suisse Advising Clients To Stick With Nike (NKE)
Credit Suisse analysts have an Outperform rating on Nike (NYSE: NKE) shares, and they are advising clients to remain invested in the stock after last night's earnings report. Nike (NKE) reported Q3 EPS of $1.01, which surpassed consensus estimates by $0.12. CS analysts said that the strong numbers were driven by better than expected sales as well as impressive expansion of gross margins.
In the client note, the analysts wrote that "we believe the stock has further to run this year driven by a number of catalysts, including accelerating futures orders (+6% vs. -1% last quarter), a V-shaped recovery in China (+10% constant-currency growth vs. -3% in 2Q and -17% in Q1), strong shipments related to the World Cup this summer, the catch up in Nike's wholesale business, and new long-term financial and strategic objectives coming out of Nike's investor meeting in early May."
Credit Suisse also raised their 2010 and 2011 full year EPS estimates for Nike. In 2010, CS expects the company to earn $3.83 versus a previous estimate of $3.70. For 2011, estimates have been raised from $4.10 to $4.40. In addition, the analysts introduced a 2012 EPS estimate of $5.00. The firm also raised their price target from $75 to $85. During the current trading session, NKE shares have surged 5.53% to $74.81 on high volume.
