Will Nike’s Q1 Earnings Boost Its Stock Price?
By Ambrish ShahSep. 21 2020, Updated 8:08 a.m. ET
Nike is set to report its earnings for the first quarter of fiscal 2021 (quarter ended Aug. 31) after the market closes on Sept. 22. The apparel and footwear company has been impacted by the COVID-19 pandemic. However, Wall Street thinks that Nike will continue to be a winner heading into its first-quarter earnings announcement.
What to expect from Nike’s first-quarter earnings
In the first quarter, analysts expect Nike to report revenue of $8.94 billion, which would be 16.1 percent lower than its $10.66 billion in revenue in the first quarter of fiscal 2020. If the company's sales surge beyond the estimates, it will mainly be driven by growth in digital sales. Since global economies reopened, Nike’s sales likely rebounded in the first quarter. In the fourth quarter of fiscal 2020, Nike’s revenues fell by about 38 percent year-over-year to $6.31 billion.
Analysts expect Nike to report an adjusted EPS of $0.46 in the first quarter, which represents a significant fall year-over-year from $0.86. However, the company experienced a net loss of $790 million in the fourth quarter of fiscal 2020. Investors should also watch for the company’s inventory levels in the first quarter.
Several analysts raised their target price for Nike stock before the company’s first-quarter results. On Sept. 18, Needham raised its target price for Nike stock to $132 from $113. Morgan Stanley increased its target price to $142 from $121, while Raymond James raised its target price to $121 from $115. Barclays lifted its target price to $132 from $118. Last week, Piper Sandler, BTIG, and Deutsche Bank also raised their target prices for Nike stock.
What is Nike's stock price today?
Nike stock was down about 1.2 percent at $113.30 in pre-market trading on Sept. 21. The stock fell 1.5 percent on Sept. 18 and closed at $114.66 with a market capitalization of $181.5 billion. Nike stock has fallen by 3.9 percent in the last five days, while it has risen by 30.8 percent in the last year.
Nike stock is trading 4.8 percent below its 52-week high of $120.48 and 91.1 percent above its 52-week low of $60.00. Year-to-date, the stock had risen by 13.2 percent as of Sept. 18.
Should you buy Nike stock?
Currently, analysts' stock price forecast for Nike is $126, which suggests a 9.9 percent upside. The highest target price for Nike is $150, which implies a 30.8 percent upside. Analysts' lowest target price is $95, which suggests a 17.1 percent downside. Among the 26 Wall Street analysts who track Nike, 23 recommend a buy, two recommend a hold, and one recommends a sell.
