Ahead of the Bell: Nike

Nike shares rise in premarket after 2Q profit beats Street, analysts upbeat on company

Associated Press

NEW YORK (AP) -- Nike shares rose slightly in premarket trading Friday after its second-quarter earnings topped Wall Street's view.

On Thursday Nike Inc. reported quarterly earnings of 59 cents per share on revenue of $6.43 billion. Analysts surveyed by FactSet predicted earnings of 58 cents per share on revenue of $6.44 billion.

Analysts are upbeat about the footwear and clothing company's business.

Kate McShane of Citi Investment Research raised Nike's price target to $90 from $81 and maintained a "Buy" rating. In a client note, the analyst said that Nike had an impressive quarter considering the current struggles of the retail sector.

"We see continued momentum behind Nike's brands, with ongoing investments in marketing, innovation, direct-to-consumer and supply chain technology helping to drive further share gains, expanded distribution and increased pricing power," the analyst wrote.

Janney Capital Markets' Eric Tracy said that Nike's ability to refresh its product pipeline and its expanding and improving distribution continues to support its pricing and global market share gains.

"We still love a lot of points to the Nike story: innovation pipeline, long-term global growth, revolutionary manufacturing, structural levers and a strong cash position," the analyst said.

Tracy kept a "Neutral" rating and $72 price target.

Shares of Nike added 24 cents to $78.50 before the market open. The stock is up 52 percent year to date, and hit an all-time high of $80.26 last week.

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