Nike Inc (NYSE: NKE) shares were falling
Friday despite reporting a strong third-quarter earnings
beat on Thursday.
Morgan Stanley Analyst Lauren Cassel said that although expectations are high, Nike remains the firm's top pick and recommends
buying the dip, as the apparel maker's direct-to-consumer sales are in the early innings.
The third quarter was the first $1-billion quarter for Nike Digital, Casell said, citing CEO Mark Parker.
“Nike's ability to scale innovation at an increasingly faster pace is a clear differentiator and [it] is one of the few consumer
discretionary companies to benefit from the shift to e-commerce,” Cassel said in a Friday note.
Morgan Stanley maintained an Overweight on Nike with a $103 price target.
'A Difficult Hurdle'
Wells Fargo analyst Tom Nikic called Nike a victim of its own success, but said there is still much to like about the
company.
“Basically, the stock was trading at an all-time high multiple heading into the print and Street numbers were too optimistic —
which made for a difficult hurdle for the stock,” the analyst said in a Thursday note.
Wells Fargo maintained a Market Perform rating on the stock with a price target lifted from $76 to $80.
Nike Set To Gain Share From UA, Skechers?
Canaccord Genuity analyst Camilo Lyon said Nike’s core innovation pipeline is robust.
The company is amplifying its innovation in core footwear, which should enable it to gain market share from competitors —
particularly Skechers USA Inc (NYSE: SKX) and
Under Armour Inc (NYSE: UAA), the analyst said in
a Friday note.
Canaccord reiterated a Buy rating with a $96 price target.
UBS: Limited Multiple Expansion Ahead
UBS analyst Jay Sole said Nike’s recovery is complete and is reflected in the stock price.
Sentiment is very bullish, and the stock's 0.7-percent short interest indicates that positioning is also bullish, the
analyst said in a Friday note.
“We see limited multiple expansion potential from here because of these factors."
UBS maintained a Neutral rating on Nike and lowered the price target from $87 to $86.
BofA Projects Higher Digital Marketing Costs
Bank of America Merrill Lynch analyst Robert Ohmes took a markedly different stance on Nike.
Strong FY20 revenue growth may only partially offset an outlook for elevated expense pressures given Nike’s shift-to-digital,
“as we continue to expect EBIT margin headwinds due to the rise in digital marketing costs (particularly paid search)," the analyst
said in a Friday note.
BofA maintained an Underperform rating with a $60 price objective.
Cowen: Nike Execution Is Flawless
Cowen analyst John Kernan said Nike’s execution is flawless, and high-single-digit sales growth and mid-teens EPS growth
guidance suggests confidence in FY20.
“Nike’s Express
Lane is an enabler of 2x speed and continues to scale and grow as a percentage of overall business,” the analyst said in a
Friday note.
Cowen maintained an Outperform rating and lowered the price target from $92 to $90.
Edward Jones: Shares Are Fairly Valued
Edward Jones analyst Brian Yarbrough said Nike holds an enviable position as the clear leader in the global athletic footwear
and apparel market — but added that the shares are fairly valued.
“We are impressed with the solid sales gains across all of its markets as the company continues to take market share, but the
company did experience a sales deceleration in every market.”
Edward Jones maintained a Hold rating on Nike
Nike shares were down 5.75 percent at $82.95 at the time of publication Friday.
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Photo courtesy of Nike.
Latest Ratings for NKE
Date |
Firm |
Action |
From |
To |
Mar 2019 |
Wells Fargo |
Maintains |
Market Perform |
Market Perform |
Mar 2019 |
UBS |
Maintains |
Neutral |
Neutral |
Mar 2019 |
Nomura |
Maintains |
Buy |
Buy |
View More Analyst Ratings for
NKE
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