Has Nike Stock Bottomed? Analysts Explore Q1 Print, Outlook, Back-To-School Trends

Zinger Key Points
  • Nike provided “healthy commentary on retail sell-through trends and back-to-school,” one analyst says.
  • The company progress in operational and financial stability, while the macro backdrop has become even more uncertain, another analyst added.

Nike Inc NKE reported upbeat first-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways:

  • Goldman Sachs analyst Kate McShane maintained a Buy rating and price of $136.
  • Telsey Advisory Group analyst Cristina Fernández reiterated an Outperform rating and price target of $128.
  • Oppenheimer analyst Brian Nagel reaffirmed an Outperform rating on the stock.
  • Morgan Stanley analyst Alex Straton maintained an Overweight rating and price target of $126.
  • Keybanc analyst Ashley Owens reaffirmed a Sector Weight rating on the stock.

Check out other analyst stock ratings.
Goldman Sachs: Nike’s fiscal first-quarter results were better than feared, with its earnings beat driven by higher margins, McShane said.

The company reported North America and total revenues in-line with expectations and provided “healthy commentary on retail sell-through trends (+MSD Y/Y) for 1Q/2Q and back-to-school,” the analyst stated. “Solid momentum at wholesale, with management noting HSD to LDD retail sales growth at most key strategic partners in the quarter” was another positive in the quarter.

Telsey: “Expectations were low going into Nike's 1QF24 print,” but Nike still missed revenue expectations, Fernández wrote in a note. The stock had already lost around 20% over the past three months.

“The beat on the profit line came from both a higher gross margin driven by lower supply chain costs and lower SG&A expenses, which benefited from the delay of some technology expenses,” the analyst stated.

Oppenheimer: “Overall, while recent trends at Nike remain somewhat subdued for the company per historical standards, we continue to look very favorably upon ongoing signals of operational and financial stability at NKE, particularly against a now more uncertain macro backdrop in the US and across the globe,” Nagel wrote.

“In our view, within the NKE enterprise, the groundwork is now established to support strengthening sales and margins trends over the next several quarters,” he added.

Morgan Stanley: Nike’s quarterly results were better than expected and management’s “initial 2Q guide/FY reiteration came in better than buyside fears,” Straton said.

“This, along with seemingly trough sentiment, a path to fundamental acceleration as soon as 2H, & other constructive commentary (inventory, innovation)” sent Nike’s stock higher in Thursday’s after-hours session, the analyst stated. “We think a bottom may be behind NKE."

KeyBanc: Nike’s revenues were “slightly softer than expected,” given the challenging environment, Owens said. “Timing shifts in SG&A items led to a solid EPS beat,” he added.

“Most geographies grew (ex: North America) and the Company highlighted continued DD revenue growth in Greater China (+12% CC), though NT uncertainty remains,” the analyst wrote. The guidance suggests a slowdown in 2024 revenues, he further stated.

NKE Price Action: Shares of Nike had risen by 7.84% to $96.65 at the time of publication Friday.

Image: Pixabay

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Posted In: Analyst ColorEarningsNewsReiterationTop StoriesAnalyst RatingsMoversTrading IdeasAlex StratonAshley OwensBrian NagelCristina FernandezExpert IdeasGoldman SachsKate McShaneKeyBanc Capital MarketsMorgan StanleyOppenheimerTelsey Advisory Group
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