Citigroup Expects Strong Q4 from Nike

Citigroup has published a research report on Nike NKE in anticipation of a strong Q4. In the report, Citigroup writes, "Nike reports its 4Q12 on 6/28. We expect $1.39 versus street of $1.37 which is based on +14.4% rev growth, -80bps of gpm contraction, +14.0% SG&A yielding operating margins of 12.9% (vs. 13.6% LY). We expect strong futures based on strength in US footwear, (US NPD data released on 6/11, Nike took 630bps of share during May 2012), US apparel and the NFL (+22%); European strength from London Olympics (+14%) and ongoing strength in emerging markets (+20%). Our est is in-line with what NKE reported last Q and a slight acceleration on a 2 yr basis." Citigroup maintains its Buy rating and $123 price target on Nike, which is currently trading down ~3.88% from yesterday's $107.60 closing price.