Recent analyst actions on Nike
Though Nike’s (NKE) strong quarterly performance didn’t translate into a stock price gain, Wall Street did respond positively to the company’s robust results. At least eight Wall Street analysts raised their price targets on the sportswear giant.
“Key initiatives designed to reignite Nike’s growth in (North America) and around the globe are gaining traction and were evident in its (third quarter) results that beat across all lines,” said a Wedbush analyst while raising the company’s price target from $74 to $75.
Nike “posted a nice fiscal third-quarter beat, as better full-price sell through drove gross margin upside and international growth remained robust,” wrote a Jefferies analyst. The firm raised its price target on Nike to $68 from $59. “Importantly, the North American business is inflecting in the fiscal fourth-quarter, fueled by product innovation… We believe Adidas’s share gains are abating and Nike is poised to regain share,” the analyst added.
Canaccord Genuity analyst Camilo Lyon said, “While this sounds very positive, we (and the Street) had been expecting North America to return to growth in the fourth quarter (of low single digits) versus guidance of 0 percent which seems to deflate the excitement somewhat.” The analyst raised the price target from $60 to $62 while maintaining a hold rating.
Wall Street’s ratings
Nike is covered by 37 Wall Street analysts, who together rate the company a 2.2 on a scale where one is a “strong buy” and five is a “strong sell.” Columbia Sportswear (COLM) and Lululemon Athletica (LULU) have similar ratings of 2.3 and 2.2, respectively. Under Armour (UAA) has a weaker rating of 3.2, and Skechers (SKX) has a better ranking of 1.5.
59% of the analysts covering Nike suggest buying the company, 37% recommend holding it, while the remaining 5% have a sell recommendation.