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Susquehanna Rated Nike as ‘Positive’


Nov. 20 2020, Updated 4:48 p.m. ET

Price movement

Nike (NKE) has a market cap of $87.4 billion. It rose 0.06% to close at $51.82 per share on October 11, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.61%, -7.5%, and -16.4%, respectively, on the same day.

NKE is trading 3.8% below its 20-day moving average, 7.0% below its 50-day moving average, and 10.0% below its 200-day moving average.

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Related ETF and peers

The iShares Russell Top 200 Growth ETF (IWY) invests 0.98% of its holdings in Nike. The ETF tracks an index of US large-cap growth stocks selected from 200 of the largest US companies by market cap. The YTD price movement of IWY was 2.9% on October 11.

The market caps of Nike’s competitors follow:

  • F. Corporation (VFC): $22.5 billion
  • Under Armour (UA): $15.5 billion
  • Skechers USA (SKX): $3.6 billion

Nike’s rating

On October 11, 2016, Susquehanna initiated the coverage of Nike with a “positive” rating and set the stock’s price target at $63.00 per share.

TheStreet reported, “Nike’s stock is down about 17% so far this year. This decline creates an opportunity to buy the “world class” stock, Susquehanna said.”

TheStreet added, “Nike has a strong pipeline with improving average selling prices, the firm added.”

The report also noted, “Susquehanna noted that the athletic retailer is facing completion from sports retailer Under Armour (UA) and Adidas (ADDYY).”

The report continued, “But Nike ‘rarely remains complacent for very long,’ and the Beaverton, OR-based company historically responds well to challenges, the firm said.”

Performance of Nike in fiscal 1Q17

Nike (NKE) reported fiscal 1Q17 revenue of $9.1 billion, a rise of 8.3% from $8.4 billion in fiscal 1Q16. Revenues from its Footwear, Apparel, and Equipment segments rose 6.8%, 8.9%, and 3.7%, respectively, and revenue from its Global Brand segment fell 42.3% between fiscal 1Q16 and fiscal 1Q17.

Nike’s revenues from North America, Western Europe, Central and Eastern Europe, Greater China, and Japan rose 6.1%, 7.4%, 9.7%, 15.1%, and 36.9%, respectively, in fiscal 1Q17. Its revenue from emerging markets fell 2.2% YoY (year-over-year) in fiscal 1Q17. The company’s gross profit margin fell 4.2% YoY.

Nike’s net income and EPS (earnings per share) rose to $1.3 billion and $0.73, respectively, in fiscal 1Q17, compared to $1.2 billion and $0.67, respectively, in fiscal 1Q16.

Its cash and cash equivalents fell 18.1%, and its inventories rose 10.9% YoY in fiscal 1Q17. Its current ratio fell to 2.7x, and its debt-to-equity ratio rose to 0.74x in fiscal 1Q17, compared to its current and debt-to-equity ratios of 2.8x and 0.61x, respectively, in fiscal 1Q16.

In fiscal 1Q17, Nike (NKE) repurchased 19 million shares for ~$1.1 billion. On August 31, 2016, it scheduled the delivery of $12.3 billion in orders between September 2016 and January 2017. This figure translates to a 5% YoY rise in orders and a 7% rise on a currency-neutral basis.

For an ongoing analysis of the consumer sector, please visit Market Realist’s Consumer Discretionary page.


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