Nike (NKE) To Benefit From Margin Opportunities, New Product Cycle
Analysts at Oppenheimer & Co maintain their "perform" rating on Nike Inc (NYSE: NKE), while raising their estimates for the company.
NKE posted its results for the latest quarter significantly ahead of the estimates. According to Oppenheimer & Co, “…Nike is about to get into the toning category, in its own way, with new product for women arriving in the back-half of the year.” “This will certainly help to validate the category and continue to drive an incremental customer to the athletic footwear retailers… NKE's 38% EBIT margin in its Chinese business was certainly impressive but aided by the way it accounts for certain demand creation expenses.” the analysts say.
“It appears that Nike has the wind at its back with additional margin opportunities and what appears to be the beginning of a new product cycle. This is one stock that we hate to miss but, unfortunately, we have, given its recent move. We will look for any pullback to get involved as the positives clearly outweigh the negatives, in our view,” the analysts add.
Oppenheimer & Co has raised its EPS estimates for FY2010 and FY2011 to $3.81 and $4.24, respectively.
