Q3 Preview: Commodities to Have Little Effect on Nike (NKE), Well Insulated Against Elements
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Get Alerts NKE Hot Sheet
Price: $40.76 +1.37%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 4%
Revenue Growth %: -2.9%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 4%
Revenue Growth %: -2.9%
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Nike, Inc. (NYSE: NKE) is trading stronger today, ahead of the company's third quarter 2011 earnings results, expected out after the market closes. Shares are up 0.3% this afternoon.
NKE is expected to report EPS of $1.11 on revs of $5.17 billion. Last quarter, the Beaverton, OR-based performance clothing manufacturer reported EPS of $0.94 with revs of $4.84 billion, exceeding estimates on the top and bottom. Looking back at Q310, Nike produced EPS of $1.01 on revs of $4.7 billion, beating the Street.
Shares gained 2% through the quarter, to $88.72 at the end of February, 2011. The stock is down 4.3% since then, and closed-out 2010 about 35% better.
Data from Bloomberg has 12 analysts with a Buy on NKE, 6 with a hold, and none suggesting to Sell. The analyst price target average is $98.50, with a high of $100 and low of $90. Shares have traded in a range of $92.49 - $66.34 over the last 52-weeks.
Summary
Goldman Sachs is looking for strong results driven by multiple positives. First is their strong global product and innovation cycle. Nike still managed strong orders versus tough comps following World Cup sales. Second , Goldman notes Nike's focus on performance and style productivity is driving a major U.S. recovery, as data from NPD shows high-teens sales growth for the company in the quarter. Finally, Nike is well insulated from inflation. Goldman cites Nike's brand and pricing power, limited cotton exposure, and diversified sourcing.
They note: "The biggest challenge is that there is little controversy surrounding the fundamentals; while this does not preclude stock performance over time, it somewhat lessens the “upside juice” from a good quarter."
Goldman is looking for EPS of $1.14 in the quarter. They have a Buy on the shares, with price target of $95.
D.A. Davidson is looking for EPS of $1.10 and revs of $5.18 billion. DAD is modeling for about 100 basis points of gross profit margin compression, reflecting the impact of rising commodity costs and exceptionally strong margins one year ago. DAD cites strong performance from Foot Locker (NYSE: FL) and Dick's Sporting Goods (NYSE: DKS) for the potential upside to estimates this quarter.
DAD has a Buy rating on the shares, and price target of $100.
Nike Inc. is expected to release their Q311 earnings on Monday, March 17, 2011, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
NKE is expected to report EPS of $1.11 on revs of $5.17 billion. Last quarter, the Beaverton, OR-based performance clothing manufacturer reported EPS of $0.94 with revs of $4.84 billion, exceeding estimates on the top and bottom. Looking back at Q310, Nike produced EPS of $1.01 on revs of $4.7 billion, beating the Street.
Shares gained 2% through the quarter, to $88.72 at the end of February, 2011. The stock is down 4.3% since then, and closed-out 2010 about 35% better.
Data from Bloomberg has 12 analysts with a Buy on NKE, 6 with a hold, and none suggesting to Sell. The analyst price target average is $98.50, with a high of $100 and low of $90. Shares have traded in a range of $92.49 - $66.34 over the last 52-weeks.
Summary
Goldman Sachs is looking for strong results driven by multiple positives. First is their strong global product and innovation cycle. Nike still managed strong orders versus tough comps following World Cup sales. Second , Goldman notes Nike's focus on performance and style productivity is driving a major U.S. recovery, as data from NPD shows high-teens sales growth for the company in the quarter. Finally, Nike is well insulated from inflation. Goldman cites Nike's brand and pricing power, limited cotton exposure, and diversified sourcing.
They note: "The biggest challenge is that there is little controversy surrounding the fundamentals; while this does not preclude stock performance over time, it somewhat lessens the “upside juice” from a good quarter."
Goldman is looking for EPS of $1.14 in the quarter. They have a Buy on the shares, with price target of $95.
D.A. Davidson is looking for EPS of $1.10 and revs of $5.18 billion. DAD is modeling for about 100 basis points of gross profit margin compression, reflecting the impact of rising commodity costs and exceptionally strong margins one year ago. DAD cites strong performance from Foot Locker (NYSE: FL) and Dick's Sporting Goods (NYSE: DKS) for the potential upside to estimates this quarter.
DAD has a Buy rating on the shares, and price target of $100.
Nike Inc. is expected to release their Q311 earnings on Monday, March 17, 2011, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
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