UBS Raises Price Target on Nike (NKE) to $137 Following 1Q16
UBS reiterated a Buy rating on Nike (NYSE: NKE), and raised the price target to $137.00 (from $128.00), following the company's 1Q16 earnings results.
Analyst Michael Binetti commented, "Nike's global futures accelerated significantly to +17% ex-FX from +13% in F4Q—vs our above-Consensus +14% est (Street was at +11%). Importantly, we believe NKE can actually accelerate futures again to above +17% in the NT given: 1) F1Q futures were heavily back-weighted; 2) World Cup compares roll off in F1Q; & 3) Olympics orders start over next few qtrs. On our math, if wholesale rev growth tracks to recent futures (+mid-teens) and DTC holds its 2-yr stacked rate, Nike could be on track to +16% revenue growth ex-FX for the year—well above guidance for +low double digits & our +13% est. We are raising our FY16E EPS to $4.32 (+17% YOY) from $4.25, but still see significant upside to our estimate. As such, we are raising our target P/E to 28x from 27x, and our PT to $137 from $128. Reiterate Buy."
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Shares of Nike closed at $114.79 yesterday.