Nomura Maintains Buy on Nike (NKE) Despite Disappointing Future Orders; PT to $60
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Nomura Securities analyst Simeon Siegel lowered his price target on Nike (NYSE: NKE) to $60.00 (from $64.00) but maintained a Buy rating following a Q1 beat but future orders that were below expectations.
Siegel commented, "American business, 1Q posted a sales/EPS beat with a worse-than-expected GM, offset by better than expected SGA (fig 12). There appears to be three primary factors at play within GM, two of which appear more one-time, or optical, in nature: 1) pressures from the golf exit and 2) a shift in costs from operating overhead into COGs, with 3) growing off-price penetration impact likely the only real support for bear case. Despite the threat from a push by competition & disappointing futures, we view NKE’s scale & dominance as a LT barrier to entry & maintain our Buy despite what appears a nascent share loss."
Shares of Nike closed at $55.34 yesterday.
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