20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
- Raymond James analyst Rick Patel reiterated an Outperform rating on the shares of Nike Inc (NYSE:NKE) and raised the price target from $130 to $135.
- Nike Q3 revenue increased 14.0% Y/Y, well ahead of the Street estimate.
- Direct continued to be strong at 22% y/y as Nike’s structural shift towards a bigger Direct-to-Consumer model continues, noted the analyst.
- Wholesale sales increased 18% y/y due to strong demand for seasonal products and higher shipments due to earlier supply availability.
- The analyst views NKE as leaning into Wholesale more aggressively than it historically has as it seeks to right-size inventory.
- Given the magnitude of the strength over the past couple of quarters, and still-somewhat high inventory existing F3Q, the analyst sees the potential for upside again in F4Q.
- In the analyst’s view, the clearest drivers of revenue growth in FY24 include ongoing mix shifts towards Direct as NKE seeks 60% penetration, accelerating revenue growth in China on the reopening and easy comparisons, and higher average selling prices on fewer y/y markdowns and the likelihood of price increases as NKE seeks to offset cost inflation.
- The 325 basis points contraction in gross margin to 43.3% was attributed to higher markdowns, higher input costs, elevated freight/logistics costs, and FX partly offset by strategic pricing actions.
- The analyst continues to believe NKE has room to recapture “trapped GM%” from transitory issues, which will become more evident in FY24.
- The analyst models China growth accelerating over the next few quarters and model FY24 China revenue +13% y/y.
- Nike appears to be taking more aggressive action to work through excess and now plans to be in a healthy inventory position by the end of FY23, said the analyst.
- Price Action: NKE shares are trading lower by 3.00% at $121.84 on the last check Wednesday.
- Photo Via Company
20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
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