UPDATE: RBC Capital Recommends Buy Any Pullback on Nike (NKE) PT Raised to $165
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RBC Capital analyst Kate Fitzsimmons raised the price target on Nike (NYSE: NKE) to $165.00 (from $160.00) after 3Q sales missed at +3%/-1%CC (vs. Street +9%) but EPS of $0.90 beat the Street at $0.76 on better margins and ~$0.05 from a lower tax rate. The sales miss was largely led by wholesale declines due to unfavorable shipment timing due to global container shortages, port congestion delays in North America (delaying inventories 3w), and closures in Europe. Ex-the bottlenecks associated with the West Coast ports, revenues would have landed closer to +6-7%.
The analyst reiterated the Outperform rating,stating "With the shares trading at 36x FY2 consensus headed intothe print, expectations were not low on NKE shares. Bottom line, we view any pullback of NKE as a buying opportunity, as the 3QF21 revenue miss was largely led by transitory supply constraints. With bottlenecks being managed, brand health strong, higher-margin digital resonating, and China outperforming, momentum is healthy headed into accelerating share gains into FY22 and multi-year. In the NT, we expect the 4Q sales and margin outlooks in particular are conservative, with the FY21 guidance raise showing the outlook has not dimmed."
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