UBS Raises PT on Nike (NKE) to $96; Two Key Indicators Might Hint that FY15 Guidance is Conservative

UBS bumps its price target on Nike, Inc. (NYSE: NKE) from $90 to $96 and maintains a Buy rating following Q1 results.

Analyst Michael Binetti said: Nike reported F1Q EPS of $1.09 ($1.04 excl a tax lift) vs UBSe/Street: $0.88. Key upside drivers for F1Q EPS incl: 1) +15% rev growth YOY (UBSe: +11.7%, Street: +12%), 2) better GMs +170bp YOY (UBSe: +75bp, Street: +85bp), and 3) less SG&A deleverage than expected (+160bp YOY vs UBSe +275bp—though some SG&A was pushed to remainder of year) ... We are raising our FY15E EPS to $3.63 (+21.5% YOY) from $3.39, and FY16 to $4.15 (+14% YOY) from $3.88.

Two indicators that could mean FY15 guidance was conservative:

1) Global futures growth of +14% was slightly back-weighted in the quarter (implying wholesale rev growth could accelerate in each of the next 2-qtrs); and

2) the ASP lift to futures accelerated to +5% in F1Q15 vs. only +4% in F4Q14.

For an analyst ratings summary and ratings history on Nike click here. For more ratings news on Nike click here.

Nike closed at $79.75 yesterday.

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