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Deutsche Bank Starts Nike (NKE) at Buy; Firing on Many Cylinders

June 25, 2013 10:53 AM EDT Send to a Friend
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Price: $80.12 -0.73%

Rating Summary:
    21 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 10 | Down: 21 | New: 42
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Deutsche Bank initiates coverage on Nike (NYSE: NKE) with a Buy rating and $68 price target Tuesday.

Analyst Dave Weiner comments, " We like NKE stock into FY14 (May '14), as the brand's top-line momentum should translate in to accelerating EPS growth. The reality is that Nike Inc. is benefiting from a confluence of positive catalysts, including share gains (strongly so in the U.S.), the margin benefit of channel, product, and geog. mix shifts (30bp+/year, DB est.), a pending turnaround in the high margin Chinese business, and long-term sales/margin support from the Flyknit footwear/manf. platform."

Weiner said, first the business has momentum and is hitting on many cylinders; second, the China turnaround, while still on the come, has started in earnest; third, too early to tell if Flyknit is a game-changer, but expense benefits are underappreciated; and Fourth, their proprietary global DISCOUNT TRACKER
suggests that Nike Inc.'s Retail promotions and discounts, globally, are improving.

The firm's $68 price target is based on a 15% EPS growth profile and 150% FY14 PE/G.

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 $59.95 yesterday.




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