Buckingham Research Reaffirms Nike Is Still The Best Growth Story In Consumer

Shares of Nike rose on Friday after the company reported its first quarter results in which earnings of $1.34 exceeded the consensus estimate of $1.19 while sales rose five percent to $8.4 billion. Following the print, Scott Krasik of The Buckingham Research Group maintained a Buy rating on the stock with a price target raised to $140 from a previous $126. Krasik was impressed by Nike's first quarter results, specifically the "broad-based" double digit global revenue growth, "strong" margins and "disciplined" expense management. Accordingly, the analyst reaffirmed the company as the "best growth story in consumer" as it is one of the few large cap firms that are expected to continue growing both its top and bottom line results at a double digit rate over the next few years. Krasik pointed out that even in Nike's "most mature" market of North America, futures at the end of the quarter accelerated to +15 percent year over year which goes to show that the brand has "not come close" to reaching its full penetration. Looking forward, Krasik pointed out several catalysts for the stock, including: 1) the upcoming Analyst Day (10/14) event where the company may introduce new long-term financial targets, and 2) ahead of the 2016 Olympics, Nike's stock has historically gained 20 percent during an Olympic year, and 3) the 17 percent increase in global future is back-half weighted, as such it is "conceivable" that futures could accelerate again next quarter.