Dave Weiner of Deutsche Bank is cautious near term on Nike Inc NKE ahead of its second-quarter print on Tuesday, given slower-than-expected innovation, heavy discounting by retailers and a strong U.S. dollar.
A Look Ahead
For the second quarter, Weiner sees $0.43 EPS on $8.070 billion in revenues, with gross margin estimated at 44.3 percent. Consensus is in line with the analyst’s EPS estimate, but slightly higher on revenue.
“Overall, we remain cautious near term on the stock given, in part, strong competition and a shift to lifestyle products, though mgmt. comments on the development pipeline will be key,” Weiner wrote in a note.
Near-Term Focus
The near-term focus is centered around N.A. futures, ASP and second-half inflection. However, Weiner remains Buy-rated on Nike shares given its long-term drivers such as DTC/intl./apparel shifts, footwear automation, and localized manufacturing.
Shares of Nike closed Friday’s trading session at $50.92.
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