UPDATE: J.P. Morgan Raises PT on Nike on Multiple Positive Factors
In a report published Tuesday, J.P. Morgan analyst Matthew R. Boss reiterated an Overweight rating on Nike (NYSE: NKE), and raised the price target from $64.00 to $70.00.
In the report, Boss noted, “NKE's runway remains long with upcoming catalysts including (1) Fall Analyst Day (likely October), (2) China stabilization (1H14 in our view), and (3) Flyknit scale (higher GPM). Looking ahead, we see 3-5 years of mid-teens EPS growth driven by a HSD+ top-line pipeline (product & expanding points of distribution), EBIT inflection w/ gross margins ~300bps below prior peak, and an $8B buyback equating to $4-$5 of EPS power by FY16E. A key tenet of our 2/11 upgrade to OW, NKE is more efficiently utilizingits balance sheet with proceeds from its $1B debt offering (largest in 10+ years) to be used for continued investment (i.e. HQ, N.A. DC, China HQ) and increased focus on shareholder returns through dividend increases and share repurchases. While the inventory overhang in China will not turn overnight (GPM headwind of ~50bps in 3Q; recent Belle comments), we believe the multi-year story is firmly on track.”
Nike closed on Monday at $63.96.
Latest Ratings for NKE
|Jan 2017||Atlantic Equities||Initiates Coverage On||Overweight|
|Jan 2017||CLSA||Initiates Coverage On||Underperform|
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