Nike’s China Recovery a Concern, But Analyst Confident in the Near Term By

© Reuters.

By Sam Boughedda

Analysts at both Cowen and UBS released notes on Nike (NYSE:) Monday, highlighting macro concerns such as China headwinds and supply chain issues.

Nike shares are up 1.3% at the time of writing.

A Cowen analyst maintained an Outperform rating but cut the firm’s price target on Nike to $124 from $127 per share in a note Monday.

The analyst said they are updating their FX assumptions as “there was roughly 100bps+ in deterioration in blended FX rates relative to the USD since July.”

He explained that their model’s largest points of uncertainty “relate to Europe demand/SG&A, N. America inventory levels and China recovery – all of which have wide ranges of outcomes.” However, Cowen believes management can reiterate revenue growth excluding FX.

Elsewhere, a UBS analyst reiterated a Buy rating and $156 price target on Nike shares following a shareholder meeting. He said that at the meeting, the company addressed multiple topics relevant to current investor debates, such as its Consumer Direct Acceleration (CDA) strategy, innovation, China, and supply chain.

“Our main takeaway from the event was Nike’s strong conviction around its CDA strategy. We think this is a positive for the stock since investors have been increasingly wondering if Nike’s de-emphasis of some wholesale customers is the correct path forward. While macro issues may weigh on NKE near-term, we continue to have conviction in Nike over the NTM,” wrote the analyst.

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