Nike Inc (NYSE: NKE) may be in a ripe
position to improve its earnings power during a period of retail turmoil.
The leading global athletic brand has suffered from negative sentiment with shares failing to gain much traction over the year
despite market-wide highs,
but analysts are starting
to turn around.
Andrew Burns of DA Davidson believes Nike will be able to improve
earnings by accelerating innovation, building stronger direct to consumer capabilities and streamlining its cost structure.
According to the analyst, athletic brand retailers will be one of the most disrupted retail channels given that the largest
brands are entering a direct
to consumer movement, sporting goods retailers were the ones who started the omni-channel movement, and increasingly battling
other channels for market share.
A strongly executed transition to digital and direct to consumer should leave Nike relatively unscathed.
“We believe Nike’s favorable long-term operating growth potential will be increasingly evident as we exit this period of
transition,” said Burns.
A potential slowdown from Nike’s largest competitor adidas AG (ADR) (OTC: ADDYY), after seeing growth from its meteoric rise in classics/originals would also
be a big boost to Nike’s sentiment.
Heading into Nike’s first-quarter earnings, set for Sept. 26, Burns believes estimates appear attainable and should fall in
line.
DA Davison reiterates a Buy Rating on Nike with a $69 price target.
Related Links: Nike
'Best In Class' According To Bernstein, Receives Outperform Rating
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Image Credit: image used with permission from Nike
Latest Ratings for NKE
Date |
Firm |
Action |
From |
To |
Sep 2017 |
Bernstein |
Initiates Coverage On |
|
Outperform |
Aug 2017 |
Morgan Stanley |
Maintains |
|
Overweight |
Aug 2017 |
Jefferies |
Downgrades |
Buy |
Hold |
View More Analyst Ratings for
NKE
View the Latest Analyst Ratings
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