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Analysts React To Nike's Q1 Results

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Analysts React To Nike's Q1 Results

Here is a compilation of the best reactions and insightful perspectives offered by sell-side analysts to Nike Inc (NYSE: NKE)'s mixed fiscal-first-quarter earnings report.

BofA Merrill Lynch: Neutral, Cuts 2017 EPS Estimate

Bank of America's Neutral rating is premised on Nike losing market share in North America for the first time since 2010 as adidas AG (ADR) (OTC: ADDYY) and Under Armour Inc (NYSE: UA) make inroads.

The firm lowered its 2018 earnings per share estimate by $0.05 to $2.90, citing lower revenue outlook due to deceleration in future orders.

Goldman Sees North American Correction For Nike

Goldman Sachs said Nike is in the midst of a North American correction, strangulated by overheated wholesale orders, excess inventory and tougher competition.

Related Link: These Retailers Could Feel The Effects Of Nike's Inventory Concerns

Reflecting subdued outlook for North America, Goldman lowered its earnings per share estimate for 2017 to $2.81 from $2.35, for 2018 to $2.51 from $2.67 and for 2019 to $2.88 from $3.02.

Canaccord On Sidelines, Stays At Hold

The firm maintains its Hold rating and a $52 price target on the shares of Nike, as it viewed the first quarter was peppered with red flags.

As Nike has to navigate an environment of changing consumer preferences it has not seen for years and this scenario is expected to linger for the foreseeable six to nine months, Canaccord believes the stock's risk-reward have a downward bias.

Nike Appeases Bulls, Bears Alike –UBS

Despite futures growth rate looking low, UBS said the revenue growth rate over the next few quarters will improve as Nike laps shipments that were below the futures dollar levels reported last year.

UBS trimmed its price target to $67 from $70 but stays at Buy. The firm reduced its estimates for 2017 slightly on lower gross margins.

Jefferies Sees Near Term As Chaff But Long Term As Wheat

Jefferies said, with adidas breathing down its neck, Nike is feeling the pressure, as reflected by decelerating futures orders. For those investors with a long-term horizon, Nike would make a core holding due to the best-in-class brand, an improving supply chain, am emerging China opportunity and product innovation.

Jefferies has a Buy rating and $65 price target on the shares of the company.

Related Link: There Are A Lot Of Moving Parts To Understand In Nike's Q1 Results

Citi Bullish: Raises Estimates, Price Target

Based on Citi's expectation that Nike will continue to deliver consistent +HSD-LDD top-line growth and +mid-teens or better earnings per share growth over the next three years, it thinks it continues to warrant a premium multiple relative to the market.

Citi raised its 2017 and 2018 earnings per share estimate for the company to $2.48 and $2.90, respectively, from $2.40 and $2.85. The rating on the shares is maintained at Buy, while price target is raised to $64 from $61.

Morgan Stanley Sees Competitive Landscape Inflection Point

Citing the weakness in North American revenues and futures orders relative to adidas and Under Armour, Morgan Stanley said there has been an inflection point in athletic wear competitive landscape.

The firm, however, maintains its 2017 earnings per share estimate, and rating and price target for the shares of Nike. Morgan rates Nike an Equal Weight and has a $60 price target.

At time of publication, Nike was down 0.3 percent in Thursday's pre-market, seen at $53.09.

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Latest Ratings for NKE

DateFirmActionFromTo
Dec 2020Raymond JamesMaintainsOutperform
Dec 2020NeedhamMaintainsBuy
Dec 2020Credit SuisseMaintainsOutperform

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