Nike's Set Up For Q2 Remains "More Balanced": Analyst Sees Less Negative Retailer Commentary
Portfolio Pulse from Nabaparna Bhattacharya
RBC Capital Markets analyst Piral Dadhania has reiterated an Outperform rating on Nike, Inc. (NYSE:NKE) and raised the price target from $120 to $127. Nike's stock performance has improved over the last three months, driven by a valuation re-rating and less negative sentiment. The analyst believes the risk/reward profile for Nike's Q2 2024 results is more balanced, with expectations of revenue growth and gross margin acceleration in the second half of FY24. The Q2 results are expected to be supported by less negative retailer commentary and a resilient consumer base. The analyst forecasts Q2 revenues of $13.32 billion, a gross margin of 43.9%, EBIT of $1.57 billion, EPS of $0.83, and free cash flow of $1.6 billion. Inventories are expected to remain stable at around $8.6 billion. Nike shares are trading slightly higher.
December 14, 2023 | 7:34 pm
News sentiment analysis
Sort by:
Ascending
POSITIVE IMPACT
Analyst Piral Dadhania of RBC Capital Markets has raised the price target for Nike to $127 and maintains an Outperform rating. The positive outlook is based on expected revenue growth, gross margin improvement, and less negative retailer feedback for Q2 2024.
The upgrade in price target and the positive outlook provided by the RBC analyst suggest a bullish sentiment for Nike's stock in the short term. The anticipation of a balanced risk/reward profile, along with expected revenue growth and gross margin improvement, are likely to be viewed positively by investors. The analyst's forecast of stable inventories and strong free cash flow further supports the potential for stock appreciation.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100