Nike (NKE) PT Raised to $140 at Nomura Securities
Nomura Securities analyst Robert Drbul reiterated a Buy rating and raised his price target on Nike (NYSE: NKE) to $140.00 (from $125.00) following strong results after the close.
Drbul commented, "Nike reported exceptional first quarter results, incl. a 5.4% revenue increase (+14% in CC), above our +LSD expectation, with continued strength in key North American (+9% in CC), Western European (+14%), and Chinese (+30%) markets. Despite pervasive macro concerns surrounding China, Nike delivered 30% revenue, 51% EBIT, and 22% futures order growth in the region. We are encouraged by the visibility into continued strong sales growth and highlight the 17% inc. in global futures orders (CC), well above our est. for LDD growth. Nike continues to deliver profitable growth in a difficult environment. Gross margin expanded 90bps to 47.5% in 1Q, as ASP and DTC growth (+21%, incl. 46% in e-comm; CC) offset a rise in product input and warehouse costs. SG&A increased 4% to $2.6bn (leveraged 40bps as % of sales). Similar to last fiscal year’s start, which was nothing short of astounding, Nike begins this year with impressive momentum. FY16E EPS at $1.81; FY17E EPS at $2.71."
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Shares of Nike closed at $114.79 yesterday.