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Janney Montgomery Scott Maintains a 'Buy' on Nike (NKE); Expect Moderating (But Still Strong) Top Line

June 21, 2012 7:47 AM EDT Send to a Friend
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Price: $78.55 -0.34%

Rating Summary:
    21 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 3 | Down: 4 | New: 7
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Janney Montgomery Scott maintains a 'Buy' on Nike (NYSE: NKE) price target of $123.00 (from $127.00).

Analyst, Eric Tracy, said, "Into the NKE 4Q print next week, we remain positively biased on longer-term fundamentals and think near-term risk/reward has improved as sentiment in the name has weakened of late (owing to Europe exposure, chatter on China softening), resulting in too-high competitor estimates being revised downward, which has put pressure on the shares over the last month (NKE off ~4% vs. +5% for S&P). While we expect top line trends to moderate (against stiffening compares and building FX headwinds), the market could over-read this "softening" as an end to cycle/pipeline/global growth - at the quarter, we expect shares to trade on 1) future orders (5-6 month order book) and 2) FY13 EPS guide."

Tracy points to several catalysts including NFL licenses, Summer Olympics, EuroCup, and launch of Nike+ for basketball/training. However, he does lower FY13 EPS outlook from $5.85 to $5.78.

For an analyst ratings summary and ratings history on Nike click here. For more ratings news on Nike click here.

Shares of Nike closed at $101.20 yesterday.




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