Nike Inc (NYSE: NKE) just keeps doing it.
Shares of the world’s largest sportswear company are racing toward all-time highs after delivering a fourth-quarter earnings beat Thursday.
Nike appears to emerged relatively unscathed from a severe management shakeup and pervasive misconduct allegations.
- Canaccord Genuity analyst Camilo Lyon maintained a Hold on Nike and raised the price target from $73 to $78.
- Deutsche Bank analyst Paul Trussell maintained a Buy rating and raised the price target from $84 to $87.
- Bernstein analyst Jamie Merriman maintained an Outperform on Nike and raised the price target from $76 to $84.
- Stifel analyst Jim Duffy maintained a Buy on Nike and raised the price target from $87 to $90.
- Wedbush analyst Christopher Svezia maintained an Outperform rating and raised the price target from $82 to $85.
All signs point to progress across the three elements of Nike’s triple double strategy, Canaccord's Lyon said in a note: twice the innovation, twice the speed and twice the direct connections with consumers.
“That said, this progress is appropriately reflected in NKE’s premium valuation the stock is being afforded, in our opinion."
Wedbush's Svezia said Nike’s product innovation is starting to bear fruit — and its forward guidance is likely conservative.
“Nike product is making a clear comeback, with improved design and technologies and sufficient quantities being brought to market with better speed, whether the React, the Air Max platform, or NBA.”
The Jordan brand will return to growth this year, and womens remains a material opportunity as well, Svezia said.
Stifel's Duffy said Nike is evolving into a higher-margin business that will support a multiple premium to historical levels.
“While the transition will take time, we are encouraged by early proof points and continue to view NIKE as a solid multiyear core holding."
North American fundamentals remain challenging in the near-term, yet the athletic category has long-term global secular and structural tailwinds, Duffy said.
Nike saw 3-percent revenue growth in North America in Q4, but Bernstein's Merriman was also impressed by international growth, after Nike posted a a 25-percent gain in Greater China, 10 percent in Europe, the Middle East and Africa and a 13-percent rise in the Asian Pacific and Latin America.
Deutsche Bank's Trussell said he remains confident in Nike’s strategy and argues that the acceleration in North American revenue is sustainable due to new product innovation, with 80 percent of incremental sales growth coming from new products.
The Jordan brand is improving after Nike made a conscious effort to limit the amount of excess product in the market, the analyst said.
Nike shares were rallying nearly 12 percent to $80.29 at the time of publication Friday afternoon.
Nike Back On Top With Best-Selling Shoe Of 2017
Photo courtesy of Nike.
Latest Ratings for NKE
|Jun 2018||B. Riley FBR||Maintains||Neutral||Neutral|
|Jun 2018||Credit Suisse||Maintains||Outperform||Outperform|
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