Sterne Agee CRT Reiterates Buy on Nike (NKE) as Low Tax Rates Boost EPS
Sterne Agee CRT reiterated a Buy rating and $75.00 price target on Nike (NYSE: NKE) following the company's 3Q earnings report. 3Q16 EPS was $0.55 versus the consensus estimate of $0.48. Roughly $0.04 of the beat was due to the lower tax rate as the result of increased operations outside of the U.S. Reported revenue missed expectations due to a larger FX impact than anticipated.
Analyst Sam Poser commented, "Reiterate Buy. The Nike business remains very healthy. Reported revenue missed expectations due to a larger FX impact than anticipated. The inventory levels in North America will be normalized by the end of FY16. Initial FY17 guidance is a first look and is in line with Nike's 5-year plan. The guidance is likely a base case scenario, and should increase as time proceeds. The product and innovation pipeline remains incredibly robust. FX-neutral future orders increased 17% which will likely pave the way for revenue and EPS acceleration into the European Championships & the Rio Olympics. Adjusting FY16/17 EPS estimates from $2.16/$2.50 to $2.18/$2.47, and establishing FY18 EPS estimate of $2.91."
For an analyst ratings summary and ratings history on Nike click here. For more ratings news on Nike click here.
Shares of Nike closed at $64.90 yesterday.