Canaccord Genuity Cuts Price Target on Nike (NKE) to $52 Ahead of 1Q Report
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Canaccord Genuity maintained a Hold rating on Nike (NYSE: NKE), and cut the price target to $52.00 (from $56.00), ahead of the company's 1Q earnings report. Retailing checks coupled with discussions with our industry contacts point to adidas and UA continuing to gain share at NKE’s expense.
Analyst "Our concerns on NKE are mounting. While FQ1 results to be released Tuesday, Sept. 27 AMC will likely top consensus EPS of 56c (we're at 58c) due to the highly conservative guidance issued last quarter, we believe the more important metric to watch will be futures orders. We expect global constant currency futures to decelerate to 5.6% due to five factors including: 1) increasing competitive pressures from adidas and UA impacting orders; 2) lack of exciting new product to warrant increased shelf space allocation; 3) price reductions on Nike Signature basketball not likely to be made up by unit growth; 4) inventory building in China and Western Europe; and 5) post-Olympics deceleration of orders. Taking these factors into consideration, we are lowering our F2017 sales/EPS estimates from 7.9%/ $2.38 to 6%/$2.32 as we do not see the 2H revenue acceleration implied in company guidance materializing. Given our myriad concerns, we believe further multiple compression is likely and thus lower our PT to $52. We maintain our HOLD as the stock is likely range bound with a downward bias through year end."
Shares of Nike closed at $55.41 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
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