Nike Gets Mixed Analyst Reactions on China By Investing.com

By Christiana Sciaudone

Investing.com — Nike (NYSE:NKE) got mixed news from analysts Tuesday.

Stifel reiterated a buy rating and a $168 price target on the stock, while BTIG lowered the price target to $153 from $162 while maintaining a buy, StreetInsider reported.

Shares were little changed. The company reports earnings on Thursday, and is expected to publish a profit of 51 cents per share on sales of $11.11 billion, according to data compiled by Investing.com.

Stifel analyst Jim Duffy reaffirmed above-consensus sales and earnings targets for the quarter.   

“The business has capacity for higher sales growth and gross margin expansion (we model +12% y/y and +310bps y/y), though we expect NKE positions guidance conservatively at the outset of the fiscal year, establishing a beat-raise cadence as FY22 unfolds,” Duffy wrote in a note. “Supply chain issues and early quarter demand in Greater China pose two discrete risks, both of which we believe are short-term considerations.” 

“Ultimately, we view NIKE’s global category positioning and capacity for improved margins and returns as rationale for the stock to remain a core large-cap growth holding,” Duffy said.

BTIG’s Camilo Lyon cited the potential disruption of the preference of national brands like Anta over international ones by younger consumers.

“With respect to our 4Q estimates, we see NKE delivering an in line quarter relative to our/consensus estimates of ~76% sales growth and $0.51 in EPS, as we believe softening sell-through China data in the last two months of the quarter will show up in weaker orders in future quarters,” Lyon wrote in a note. 

“While we believe NKE can ultimately flex its marketing and innovation muscles to overcome these hurdles and further distance itself from the competition, we could see near term sales volatility in Greater China,” Lyon said.