In this part of the series, we’ll look at Wall Street’s recommendation on Nike (NKE) and talk about recent analyst actions on the company. Wall Street is positive on Nike and has rated its stock a 2.1 on a scale where one is a strong buy and five is a strong sell. In comparison, rivals Lululemon Athletica (LULU), Columbia Sportswear (COLM), and Under Armour (UAA) have received ratings of 2.4, 2.2, and 2.8, respectively.
34 Wall Street analysts cover Nike stock. 65% of the analysts recommend buying the stock, while 32% recommend holding the stock. Only 3% of analysts have suggested selling the company. In comparison, 15% of analysts recommend selling Under Armour. None of the analysts have assigned footwear manufacturers Foot Locker (FL) and Sketchers (SKX) a sell.
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Several Wall Street analysts revised Nike’s price target ahead of its third quarter results. On March 15, UBS raised the target price to $67 from $60. On March 14, Credit Suisse also increased Nike’s target price to $67 from $60.
On the same day, Morgan Stanley set a target price of $56 on the company with a neutral rating. Analyst Jay Sole said that the stock has the potential to become “safe” for bulls once again after its third quarter results. Sole thinks that the sportswear giant is likely to report an improvement in North America future orders in 3Q.
Over the past two quarters, Nike has reported disappointing futures orders, which also failed to meet analyst expectations. In 2Q17, futures were down 4%. Sole expects futures to rebound slightly to -2% in 3Q.
ETF investors seeking to add exposure to NKE can consider the SPDR Consumer Discretionary Select Sector ETF (XLY), which invests 3.1% of its portfolio in NKE.