Nike (NKE) PT Raised to $65 at Susquehanna; 'Multiple Levers to Pull'
Susquehanna analyst Sam Poser raised its price target on Nike (NYSE: NKE) to $64.00 (from $65.00) while maintaining a Positive rating, suggesting management has multiple levers to pull and would take advantage of any weakness in the shares.
Poser comments, "We would take advantage of any weakness and buy shares of Nike following the company's 3Q17 EPS beat. Gross margins were a touch light in the quarter, but revenue was fairly in line, and we are seeing strong cost control benefits on the SG&A line from Nike's edit to amplify initiatives. In other words, Nike pulled one of its many levers to deliver upside. We believe Nike has a host of additional levers at its disposal to drive earnings upside going forward. Nike is leveraging its core competencies in the areas of innovation, marketing, and supply-chain in ways that we have not seen in quite some time. For example, Nike's triple-double initiatives are set to double the: 1. cadence and scale of innovation, 2. average speed-tomarket of new products from ~6 months on average to ~3 months, and 3. personal connections in the marketplace, resulting in higher customer engagement levels. Furthermore, ManRev supply chain initiatives should continue to drive gross margins, while Nike is also leveraging its partnerships with top sports leagues such as the NBA, and strengthening its relationships with top wholesale partners."