Nike Inc (NYSE: NKE) reported its fiscal
2017's third-quarter EPS ahead of expectations. The company’s revenue and EPS growth will likely decelerate over the next 12 months
due to competition, Argus’s John Staszak said in a report. Citing elevated levels of international inventories and slowing revenue
growth in Europe and China, the analyst added that Nike’s P/E multiple could rise modestly over the next several quarters.
Staszak downgraded the rating on the company from Buy to Hold. He recommended investors interested in consumer discretionary
stocks to accumulate shares of Marriott International Inc (NASDAQ: MAR).
Competitive Landscape
Nike reported its FQ3 results,
with 5 percent year-over-year growth in revenue at $8.4 billion. Operating EPS came in at $0.68, higher than the consensus estimate
by $0.15. “In the third quarter, strong NIKE brand sales were overshadowed by efforts to clear inventories and unfavorable currency
effects,” Staszak wrote.
The company’s revenue and EPS growth is likely to slow over the next 12 months, due to competition from adidas AG
(ADR)(OTC: ADDYY) and Under Armour
Inc (NYSE: UAA), the analyst stated, while adding that
the industry has remained “fiercely competitive.”
The analyst lowered the EPS estimates for FY 17 and 2018 from $2.50 to $2.41 and from $2.80 to $2.65, respectively, to reflect
significant currency headwinds and higher demand creation expense.
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Latest Ratings for NKE
| Date |
Firm |
Action |
From |
To |
| Apr 2017 |
Argus |
Downgrades |
Buy |
Hold |
| Jan 2017 |
CLSA |
Initiates Coverage On |
|
Underperform |
| Jan 2017 |
Atlantic Equities |
Initiates Coverage On |
|
Overweight |
View More Analyst Ratings for
NKE
View the Latest Analyst Ratings
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