Comparing Wall Street’s ratings for Nike and peers
In this part of the series, we’ll look at Wall Street’s recommendation on Nike (NKE) and look at Wall Street’s take on the company after its fiscal 2Q17 results.
Wall Street has a positive to neutral view on Nike and has rated its stock a 2.2 on a scale of 1 (strong buy) to 5 (sell). Although competitor Columbia Sportswear (COLM) has a slightly better rating of 2.1, Under Armour (UAA) and Lululemon Athletica (LULU) have been rated a 2.3 and 2.4, respectively.
Nike (NKE) is covered by 34 Wall Street analysts. Among these analysts, 62% recommended a “buy” on the stock, 35% recommended a “hold,” and only 3% recommended a “sell,”
Wall Street’s take on NKE’s fiscal 2Q17 results
Wall Street had a mixed reaction to Nike’s (NKE) fiscal 2Q17 results. Some seemed concerned about the company’s weak future orders and lower gross margin while others remained bullish about the company’s improved SG&A[1. selling, general, and administrative] performance and DTC[2. Direct to Consumer] sales. However, none of the analysts made a recommendation change after the company’s results.
Nike was added to the Best Idea List at Guggenheim after its fiscal 2Q17 results. Guggenheim reaffirmed its “buy” rating on the stock.
While reiterating his “market perform” rating on Nike stock, analyst Mitch Kummetz of B.Riley and Company commented, “As it relates to NKE’s guidance, we still believe that the company’s outlook is aggressive relative to its futures, but the issue with NKE’s futures is less about what impact it will have on the company’s back half sales and more about what it suggests is happening to NKE in the marketplace, especially North America, where futures are down 4%.”
While reiterating the “market perform” rating on Nike, FBR Capital’s analyst Susan Anderson noted, “We like Nike’s innovation pipeline, int’l runway, and LT margin catalysts, but we remain on the sidelines and look for improved rev growth, margin execution, and lower inventory growth. We maintain our Market Perform rating and $55 PT.”
ETF investors seeking to add exposure to NKE can consider the Vanguard Consumer Discretionary ETF (VCR), which invests 2.3% of its portfolio in NKE.