its fiscal first-quarter earnings far exceeded expectations, pushing the company’s shares up 5.3% on Wednesday morning.
At $91.81, the stock was poised to close at a record high, with the biggest percentage increase so far in 2019, according to Dow Jones Market Data. the
was slightly higher.
Wall Street analysts were gushing from Nike’s earnings report (ticker: NKE), released Tuesday evening, in notes to clients. Here’s what some had to say.
Randal Konik of Jefferies—Hold the note. Nike “crushed it”, according to Konik. He raised his target for the stock price to $97 from $80, though he still values the stock at Hold. He noted that the company achieved double-digit revenue growth – a result he described as robust – and pointed out that gross margins were better than expected.
Other positive factors he cited are the expansion of Nike’s online operations and the double-digit growth in sales of Jordan-branded products.
“NKE’s business is strengthening in North America and we expect the company to continue to recoup the share it lost to Adidas,” he wrote, referring to sales in America. North.
Still, he maintains that Nike’s valuation is expensive relative to its peers. The shoe store
(FL) is “a better way to play NKE’s resurgence,” Konik said.
John Kernan of Cowen—outperform. Kernan raised his price target to $103 from $100. He noted that business is picking up in China and Europe, management has raised its constant-currency revenue forecast, and more people are using Nike’s digital apps.
“[Nike] NKE is the preferred sportswear brand for all genders, ages and income levels as it continues to build a moat around its brand,” he said. Investments in new products and online initiatives are likely to help, he said.
Robert Drbul of Guggenheim—Buy. Drbul raised its price target from $100 to $110. Do you notice a trend?
“Despite geopolitical uncertainty and ongoing trade tensions, NKE provided strong operating metrics in the first quarter of 2020,” he wrote.
He expects sales to continue to increase as Nike continues to innovate and growth continues online, internationally and in women’s products. Strategic investments are helping the company extend its lead as a sports footwear and apparel retailer. Drbul said.
“Basically, NKE remains one of the best positioned names, in our view,” he wrote.
Sam Poser of Susquehanna Financial Group — Positive. Poser says investors should buy the shares. He raised his price target to $106 from $100.
“Momentum across geographies, categories and channels remains exceptionally strong, despite macroeconomic headwinds,” Poser wrote.
He said the company’s ongoing initiatives are compelling and its strategic investments, particularly in the digital realm, will drive high single-digit growth, ex-currency, as well as higher margins.
The company, he added, is taking market share through innovation and by making it easier for customers to interact with its products online.
Laurent Vasilescu of Macquarie Research—Outperform. Vasilescu’s note referred to the company’s successful launch of its Joyride running shoes, with the title “Tears of Joy (ride)”. It raised its price target to $98 from $89 and raised its estimate of earnings per share for fiscal 2020 to $2.98 from $2.85.
The 2020 Tokyo Olympics could boost demand later in the fiscal year, Vasilescu said, noting the business has momentum despite currency exchange rates, tariffs and a volatile macroeconomic environment.
Write to Connor Smith at [email protected]