Q2 Preview: Nike (NKE) Beats Tough Comps, Sets Sights on Olympics
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Price: $40.73 -1.21%
Rating Summary:
26 Buy, 28 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
26 Buy, 28 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Shares of Nike, Inc. (NYSE: NKE) are very modestly higher Tuesday heading into the footwear and apparel maker's second-quarter 2012 earnings report.
After the market close, Nike is expected to report earnings of 97 cents on revenue of $5.63 billion. Should Nike meet earnings expectations, it would be a year-over-year gain of about 15.5 percent.
Shares of Nike gained 11.4 percent over the quarter and are down about a percent since. The stock is up 12.6 percent for 2011.
Last quarter, Nike showed cash of $7.98 per share. Excluding cash, shares are trading for about 15.0x next year's earnings expectations, compared with 30.5x for Under Armour (NYSE: UA), and 11.2x for Adidas (OTCBB: ADDYY).
Data from Bloomberg has 14 analysts with a Buy on Nike, eight at Hold, and none with a Sell-equivalent rating. The Street's price target average is $105, with a low of $90 and high of $125.
Goldman is modeling for earnings of 97 cents per share. The firm likes demand for Nike, and sees drivers that could offset macro pressures and maintain or accelerate the trend. Tougher comps from the World Cup are now gone, and events like the Eurochampionships and Olympics are positive catalysts. Goldman says it expects "FX-neutral sales to be +15% this quarter vs. +12% last quarter, and FX-neutral orders to grow mid/high-teens vs. +13% last quarter."
Goldman believes Nike is moving past gross margin pressures, and is seeing some of the input pressure alleviated. Inventory-to-sales levels should moderate beyond the second quarter, with easing freight costs as well.
The firm offers a final thought on the big picture of Nike moving forward: "shares are well positioned for 2012’s expected backdrop, with upside drivers in a strong product cycle, the Olympics and gross margin opportunities, and some downside protection given [Nike's] Global category leadership, below-average beta, and track record of share price outperformance through various macro backdrops."
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.
After the market close, Nike is expected to report earnings of 97 cents on revenue of $5.63 billion. Should Nike meet earnings expectations, it would be a year-over-year gain of about 15.5 percent.
Shares of Nike gained 11.4 percent over the quarter and are down about a percent since. The stock is up 12.6 percent for 2011.
Last quarter, Nike showed cash of $7.98 per share. Excluding cash, shares are trading for about 15.0x next year's earnings expectations, compared with 30.5x for Under Armour (NYSE: UA), and 11.2x for Adidas (OTCBB: ADDYY).
Data from Bloomberg has 14 analysts with a Buy on Nike, eight at Hold, and none with a Sell-equivalent rating. The Street's price target average is $105, with a low of $90 and high of $125.
Goldman is modeling for earnings of 97 cents per share. The firm likes demand for Nike, and sees drivers that could offset macro pressures and maintain or accelerate the trend. Tougher comps from the World Cup are now gone, and events like the Eurochampionships and Olympics are positive catalysts. Goldman says it expects "FX-neutral sales to be +15% this quarter vs. +12% last quarter, and FX-neutral orders to grow mid/high-teens vs. +13% last quarter."
Goldman believes Nike is moving past gross margin pressures, and is seeing some of the input pressure alleviated. Inventory-to-sales levels should moderate beyond the second quarter, with easing freight costs as well.
The firm offers a final thought on the big picture of Nike moving forward: "shares are well positioned for 2012’s expected backdrop, with upside drivers in a strong product cycle, the Olympics and gross margin opportunities, and some downside protection given [Nike's] Global category leadership, below-average beta, and track record of share price outperformance through various macro backdrops."
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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