Ahead of Nike Inc (NYSE: NKE) Q1 earnings call next
week, Deutsche Bank maintains a Buy rating on the world's biggest athletic apparel company.
Nike has been feeling increased pressure from adidas AG (ADR) (OTC: ADDYY) and Under Armour Inc (NYSE: UA) and the threat that consumers are opting for more fashionable footwear from Adidas
than Nike's running shoes. According to Deutsche Bank analysts, the casual athletic and running sectors may have decelerated.
Nike remains the worst DOW performing stock year-to-date, down 11.24 percent and slightly edging Walt Disney Co
(NYSE: DIS) for the biggest declining component. Adidas, on the
other hand, is up 79 percent this year. Wall Street is looking for earnings to come in at $0.56 per share, with revenues in the
$8.84 billion range.
Related Link: How's
Nike's Strike Ahead Of Q1 Earnings? Goldman Cheers "Goal!"
Some Key Issues To Watch
- Data suggesting basketball rebounded in Q1.
- Greater China growth figures.
- Inventory and Hanjin Shipping commentary.
- If Nike reiterates its FY plan, Q2 guidance will come into focus.
- North American sales figures.
- Strategic manufacturing partnership with Apollo.
Nike Basketball In Focus
Nike's basketball segment will come largely into focus this quarter, as the company has attempted to curb Steph Curry's footwear
momentum with Under Armour after lowering the costs of its LeBron and Kevin Durant models to further compete.
Furthermore, Nike is putting an increased focus in basketball in China where it sees significant growth potential, but is seeing
some competition from Anta, Peak and Li-Ning, which all have entered the NBA, endorsing Klay Thompson, Dwight Howard and Dwyane
Wade.
Not only will the quarter be basketball-focused, but it will be a key year for Nike in basketball; the company now has the NBA
apparel deal and will be the first time any company logo will be on NBA jerseys. That means Steph Curry will be photographed
wearing Nike on his jersey, sure to cause some confusion. Kevin Durant's arrival to the star-studded Golden State Warriors could
also steal some spotlight from Curry.
"We believe Nike's basketball category is re-gaining traction in the U.S., Nike basketball footwear sales accelerated from -2
percent during the period ending 5/28 to +9 percent during the period ending 8/27," said Deutsche Bank.
Nike currently has a 92.3 percent market share in basketball footwear.
Deutsche Bank maintains a Buy rating on Nike with a price target of $75.
At time of publication, Nike was down 0.4 percent at $55.19.
Full ratings
data available on Benzinga Pro.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win
a $20 Amazon gift card!
Latest Ratings for NKE
Date |
Firm |
Action |
From |
To |
Sep 2016 |
PiperJaffray |
Downgrades |
Overweight |
Neutral |
Aug 2016 |
B. Riley |
Downgrades |
Buy |
Neutral |
Jun 2016 |
Stifel |
Maintains |
|
Buy |
View More Analyst Ratings for
NKE
View the Latest Analyst Ratings
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.