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Q1 Preview: Nike (NKE) Investors May Feel Olympics-Induced Hangover

September 27, 2012 12:46 PM EDT
Get Alerts NKE Hot Sheet
Price: $93.98 -0.16%

Rating Summary:
    31 Buy, 20 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Nike, Inc. (NYSE: NKE) shares are lower on the session heading into the athletics and footwear giant's first-quarter 2013 earnings report, expected out after the market closes today.

Currently, consensus estimates peg Nike with sales of $6.41 billion and EPS at $1.12. EPS would be a dip of 17.6 percent from last year and 4.3 percent decline form its fourth-quarter report.

Estimize consensus number sees EPS of $1.14 on sales of $6.45 billion.

The 2012 London Olympics sparkle seemed to wear thin through the quarter with shares of Nike dropping about 9.7 to $97.36 at the end of August. The stock is down just about another 2 percent since then and nearly flat for the year.

Traders and investors in Nike could glance a peer Under Armour's (NYSE: UA) second-quarter report, which was issued in July. One concern would be margins; although Under Armour easily beat sales expectations, EPS beat views by just a penny, which may indicate higher input and commodity costs. For more on Under Armour's report, click here.

Data from Streetinsider's Ratings Insider has 11 analysts with a Buy on Nike, nine at Neutral, and none with a sell equivalent call. The Street's price target average is $111, which ranges from a low of $92 to a high at $130. The current average target represents about 16 percent of upside on the stock.

Recently, analyst firm Sterne Agee updated its outlook on Nike, citing continued weakness in China and Europe as main catalysts.

In China, Sterne says Nike hasn't been able to "to translate its footwear's premium positioning in China to apparel." For Europe, the firm commented, "we expect the post-Olympics/EU Championships slump and weak economy to continue to pressure future orders. While the organizational realignment in WE is a step in the right direction, we believe that such moves take many quarters to bear fruit." For more, click here.

Investors could also listen for any progress being made on the Cloe Haan asset sale, pending litigation, and, what's happening with NFL sales given that replacement refs haven't been met with open arms by fans.

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Nike's past performance at Streetinsider's Nike's Income Statement.


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