Nike's fiscal third-quarter earnings are slated to be released on March 18th.
Rui Vieira/POOL/AFP via Getty ImagesNike will report fiscal third-quarter earnings next week, but Morgan Stanley argues that the athletic giant is a buy today, as the strides it’s made during the Covid-19 pandemic appear permanent.
Analyst Kimberly Greenberger reiterated an Overweight rating on Nike (ticker: NKE) Thursday, although she lowered her price target from $176 to $173.
The pandemic hasn’t been all good news for Nike: Store closures hit the company hard in the early days of lockdowns, and some headwinds may linger. However, Greenberger believes that the crisis allowed Nike to make impressive progress on its direct-to-consumer (DTC) model—which will serve the company well in the long term.
Greenberger writes that Nike’s “commitment to and initial execution of” its DTC model give her increased confidence in the company’s ability to grow profits, sales, and margins over the long haul. A good portion of Nike’s DTC business happens online, of course, and that accelerated shift to e-commerce should serve to further the company’s revenue goals.
Moreover, while athleisure and activewear dominated during the pandemic, Greenberger believes that these trends will remain tailwinds for Nike—even as the threat of the virus starts to fade.
Greenberg also boosted her third-quarter earnings per share forecast to 76 cents, in line with consensus estimates. This figure could prove conservative if gross margins are exceptionally strong—potentially offsetting ongoing store closures. Greenberg also thinks that fiscal fourth-quarter and full-year consensus estimates may be too low, and that Nike could raise its outlook given recent positive trends.
Nike shares are up 2.9% to $141.58 in recent trading. The stock has jumped 90.9% in the past 12 months, and is up 0.1% in 2021.
Write to Teresa Rivas at teresa.rivas@barrons.com
March 12, 2021 at 02:06AM
https://ift.tt/3qFxrbm
Nike's Earnings Will Show Its Strategy Is Working, This Analyst Says - Barron's
https://ift.tt/3g93dIW
Nike
No comments:
Post a Comment