UBS Raises Price Target on Nike (NKE) to $128 Ahead of Investor Day
UBS reiterated a Buy rating on Nike (NYSE: NKE), and raised the price target to $128.00 (from $122.00), Ahead of investor day.
Analyst Michael Binetti commented, "We're raising our PT and reiterating our Buy rating based largely on: 1) Positive read- thru's (charts in note); 2) our view that global futures will accelerate sequentially in F1Q15 (futures=75% correlated w/NKE's stock historically); and 3) our view that improving futures-vs-inventory dynamics should unlock GM upside and EPS upside potential in the NT. We are forecasting +14% global futures growth ex-FX in F1Q (an acceleration vs +13% in F4Q15) based on: 1) back-weighted F4Q futures; & 2) tough World Cup compares rolling off in F1Q. Importantly, futures could accelerate further after 1Q as Olympics orders start over the next few qtrs. ~75% of NKE's sales are done on futures and we don't see futures slowing from the ~mid-teens run-rate in the NT. With DTC (25% of NKE's total revs) growing at a 25-30% run-rate, we think NKE could deliver FY16 rev growth close to +15% (ex-FX) vs +low double digits guidance—which should mean upside to Street EPS ests and creates a positive catalyst for the stock."
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Shares of Nike closed at $115.05 yesterday.