Nike (NKE) PT Lowered to $50 at Guggenheim

Guggenheim analyst Simon Siegel lowered the price target on Nike (NYSE: NKE) to $50.00 (from $60.00) while maintaining a Buy rating.

The analyst commented: "NKE reported an EPS beat, as below-Street sales (driven by Greater China pressure with N.A. slightly ahead) were more than offset by stronger GM/ SG&A. Management reintroduced its method of guiding FY revenue/EPS (both below consensus), while NKE's new CFO provided details on his guidance philosophy (pp. 4-5). There were some positives (i.e., N.A. still grew, even if guided down; and although it didn't get much airtime, N.A.'s EBIT margin and dollars inflected positive after a long negative stretch - suggesting N.A. may actually be healthier than management is letting on, and we see ongoing opportunity for operating overhead savings) but this was a mostly negative print. With yet another downward revision, the questions remain when guidance cuts will represent the band-aid rip versus slow bleed as they continue to debate the path potential stabilization ahead. With the November analyst day ahead, we would assume management likely preferred to get the “bad news” out of the way to offer up a more positive tone in person, but clearly there has been plenty of “bad news” to spare. Recognizing ongoing noise, we lower our Price Target to $50 (from $60). And though it certainly is not easy (and certainly has not been correct), we maintain our BUY rating amid increasingly negative sentiment and a potentially emerging catalyst path (potentially troughing estimates, new CFO, November Analyst Day)."

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