Piper Jaffray Raises Price Target on Nike (NKE) Following Investor Day
Piper Jaffray reiterated an Overweight rating on Nike (NYSE: NKE), and raised the price target to $140.00 (from $130.00), following investor day. Nike is targeting $50B in sales by 2020, driven by HSD growth in North America and Western Europe, LDD in Emerging Markets and mid- to high-teens growth in Greater China.
Analyst Erinn Murphy commented, "We are reiterating our OW rating on NKE shares following yesterday's investor day which outlined the company's long-term financial outlook in which sales for 2020 are earmarked at $50 billion. We were encouraged by accelerating efforts to grow the women's business and further penetrate the DTC channel while fueling innovation and manufacturing efficiencies. The latter will be one of the largest buckets for gross margin gains which are planned annually in the 30-50 bps range. While we are aware of NKE's relative outperformance YTD versus the broader indices, we view its growth prospects and execution history as best in class. We continue to see significant share gains for NIKE across category and channel in our proprietary teen survey. Penciling out the longterm targets, we arrive at $8/share in EPS power in 2020. While our FY17 EPS estimates are unchanged, we are raising our PT from $130 to $140."
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Shares of Nike closed at $125.84 yesterday.