NEW YORK (AP) -- Shares of Nike surged in premarket trading Friday, as the clothing and footwear company's first-quarter results topped analysts' expectations.
Late Thursday Nike Inc. reported that its first-quarter profit and revenue topped analysts' expectations thanks in part to strong demand for its shoes and apparel.
The company's stock gained $3.92, or 5.6 percent, to $74.26 about three hours ahead of the market opening.
Kate McShane of Citi Investment Research expects Nike will continue to build momentum in the near- and long-term due to the strength of its brands. The analyst said in a client note that the chain had strong performances in its running, basketball and soccer categories during the quarter.
McShane also thinks that the Nike's investor day, scheduled for Oct. 9, could be an even bigger catalyst for the stock than its latest earnings report because the retailer has not held an investor day since June 2011.
McShane maintained a "Buy" rating and $81 price target on Nike shares.
Janney Capital Markets' Eric Tracy said that Nike has a lot going for it, as it's able to consistently refresh its product pipeline and make price hikes that shoppers are willing to pay. But the company does have to contend with currency fluctuations, strategic investments and boosting demand for its goods as its heads into 2014's World Cup. Tracy said that he struggles with how much of a premium should be given to the stock since its earnings per share growth — up low double-digits to mid-teens — hasn't really changed much.
The analyst reaffirmed a "Neutral" rating and $70 price target.
- Consumer Discretionary
- Kate McShane