Market Overview

The Bullish Signals That Won Nike A Price Target Increase From Wedbush

Share:
The Bullish Signals That Won Nike A Price Target Increase From Wedbush

Nike Inc (NYSE: NKE) could be nearing an inflection point, an incrementally bullish Wedbush analyst said in a new report. 

The Analyst 

Wedbush’s Christopher Svezia maintained an Outperform rating on Nike and raised the price target from $75 to $82.

The Thesis

With accelerating growth in North America, possible international growth and gross margin tailwinds, Svezia said Nike should exceed expectations through fiscal 2019. (See the analyst's track record here.)

Although the market remains wary of the promotional environment and battle for market share, Svezia said Nike will see real progress on several fronts in 2018, including inventory management and product and engagement, which should ultimately translate into long-term mid-single digit growth. Fourth-quarter sales should come in ahead of consensus at $9.4 billion and EPS of 68 cents and are driven by higher sales and better margins, the analyst said. 

In Europe, Nike is likely to take share, and Svezia forecast sustained double-digit growth in China. Progress in North America around product and speed could help improve sales opportunities in international markets as well, the analyst said. 

Nike will return to gross margin expansion for the first time in eight consecutive quarters, with FX pressure, direct-to-consumer and average selling price turning to "a more meaningful tailwind," Svezia said.  

“In all, NKE’s multiple accelerates as sales momentum builds and (gross margin) rates are expanding, which in our view are key factors in FY19." 

Nike is set to report fourth-quarter earnings June 28. 

Price Action

Nike shares are up nearly 1 percent, at last check trading at 74.74.

Related Links:

Nike's Product Line Is Tipping In A Positive Direction, According To Foot Locker

Baird Expects Nike To Reach North American Inflection With New Products

Latest Ratings for NKE

DateFirmActionFromTo
Jul 2019MaintainsOverweight
Jun 2019MaintainsNeutral
Apr 2019ReinstatesBuy

View More Analyst Ratings for NKE
View the Latest Analyst Ratings

Posted-In: Christopher Svezia WedbushAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (NKE)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
DPZMaintains280.0
SCHWMaintains52.0
GWWMaintains291.0
LIIMaintains276.0
SWKMaintains154.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Can Comcast Beat Disney And Win Fox's Assets?

TTM Technologies Is Fairly Valued, Deutsche Bank Says In Neutral Initiation