UBS analyst Michael Binetti (Buy, $86 PT)
"In our view, NT stock upside could be limited due to: 1) futures that are likely to decelerate in F4Q; 2) FX pressures limiting NT EPS upside. At Thursday's close Nike's stock traded at 24.7x our fwd EPS est (3-yr avg P/E: 19.3x)-leaving less room for upside until visibility toward a futures or EPS acceleration improves. That said, NKE remains a most-preferred consistent LT growth story-currently limited only by macro pressures, w/virtually no change in the organic growth rate. We continue to rate the stock a Buy."
Sterne Agee analyst Sam Poser (Buy, $85 PT)"Nike continues to position itself well for long-term growth. Unfortunately, FX headwinds, especially in emerging markets, will impact FY15 results. Nike is controlling what it can control through strong product innovation and superior brand discipline. The 14% increase in currency-neutral future orders and the 14% FX neutral sales results in 3Q14 are loud indications of the strength of the Nike brand." Canaccord Genuity analyst Carmillo Lyon (Neutral, $71 PT) "NKE reported F3Q results of 76c vs. our/consensus 66c/72c estimate. A push-out of World Cup expenses (+9c) into Q4 comprised the largest contribution to the beat (relative to our model). Additionally, stronger sales growth (+2c) and lower taxes (+3c) were partially offset by less gross margin expansion (-1c) and higher other expense (-3c). The solid sales
momentum NKE is experiencing across product categories (e.g., basketball, running, footwear, apparel) and geographies (NA, Western Europe, and Emerging Markets) coupled with 14% futures growth, is impressive. That said, FX headwinds hurt Q3 results and will continue to mount through F2015 with added pressure from continued investments in women's, DTC, and digital. As such, F2015 EPS growth is now likely at ~12% with little upside opportunity. Given NKE's premium 24.5x valuation, we prefer to leverage its product strength via the retailers (FL and FINL) and as thus maintain our HOLD rating." Deutsche Bank analyst Dave Weiner (Buy, $85 PT) "Once again, the quarter's results & commentary were strong/above expectations, but out-period guide from FX & EPS flow-through weighs modestly on the stock after-hours. To follow, we brief the positives & risks from the release, but continue to like Nike stock for (1) impressive core rev. growth (units & ASPs), (2) global share potential, (3) ongoing positive channel/product/geo. GM shifts, and (4) incremental opportunities from a China reset & Flyknit/3D printing/manf. initiatives. We trim EPS in-line with new plan, but maintain $85 PT."
-- Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia
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