With Growth Flattened, Where Can Nike (NKE) Find a Catalyst?

FBR Capital's Susan Anderson explains why Nike (NKE) may continue to struggle.
By Giovanni Bruno ,

NEW YORK (TheStreet) --Nike (NKE) - Get Report , the third worst performing Dow stock year-to-date, continues to search for a spark in sales and FBR Capital's Susan Anderson discussed where they may find it.

On CNBC's "Power Lunch" today, Anderson outlined the opportunities in front of the company as well as setbacks they currently face in an attempt to answer this question. 

One opportunity she pointed to was the 2016 Olympic Games in Rio de Janeiro. The Olympics have been an event where Nike has capitalized in the past, however, "this time around it seems like there is a lot more competition versus historically. You have Under Armour (UA) coming up, particularly in the international markets. And you have Adidas (ADDYY) really getting its game back on" Anderson noted.

Recent data suggests that Nike is also losing market share to these two competitors. "The most recent basketball data has shown Nike has started to lose market share, but it's tough to keep when you have 90% of the market share, I don't think it's a surprise" Anderson said.

Moreover, "North American futures went from 14% to 10%, and this last quarter to 6% and actual growth in North America this last quarter was only flat." she explained.

"The need to clear through that and the discount channels such as outlets or third parties, could take away from full price sell. So it may be difficult even with some new products and new innovations coming out to really jump start that North American sales again." Anderson warned.

Shares of Nike closed lower 0.74% to $55.20 on Tuesday.

Separately, TheStreet Ratings rates Nike as a "Buy" with a ratings score of "B". This is driven by multiple strengths, which TheStreet Ratings believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks TheStreet Ratings covers.

The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and solid stock price performance. Although no company is perfect, currently TheStreet Ratings does not see any significant weaknesses which are likely to detract from the generally positive outlook.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: NKE

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