UBS Cuts Price Target on Nike (NKE) to $67 Following 1Q Report
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UBS maintained a Buy rating on Nike (NYSE: NKE), and cut the price target to $67.00 (from $70.00), following the company's 1Q earnings report. NKE reported EPS of $0.73, coming in ahead of the Street's $0.56. EPS was driven by a one-time tax break. Management maintained FY17 guidance for +HSD/+LDD revenue growth considering F1Q global futures slowed to +7% from +11% in F4Q.
Analyst Michael Binetti commented, "Nike reported F1Q EPS of $0.73—or $0.58 excl. a tax boost & other income above our model (UBSe $0.58, above Street: $0.56). Global futures increased +7% YOY (ex-FX) vs our +8% est. Despite recent concerns, Nike delivered strong +10% rev growth (ex-FX) vs our +7% est. Though GMs were worse-than-expected at -200bp YOY (partly due to FX, exiting Golf, and a cost reclass, UBSe: -100bp), gross profit dollars were in line with our est (+3% YOY). Surprisingly, revenues in the battleground North America market significantly beat our est (+6% vs UBSe: +2%). That said, North America futures were worse than expected at +1% (UBSe: +4%). Nike maintained FY17 guidance for +HSD/+LDD rev growth, though lowered GMs significantly (to -80bp YOY, vs +30-50bp prev)—but also lowered SG&A dollar growth to +MSD/+HSD from +HSD prev."
Shares of Nike closed at $55.34 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
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