Nike Shares Hit 52-Week Low as Analysts Cut Targets, But Not Ratings
By Dean Seal
Shares of Nike Inc. fell more than 13% to a 52-week low of
$82.50 on Friday after delivering a downbeat outlook that pushed
Wall Street analysts to cut their price targets for the company,
though not their ratings of the stock.
The shoe manufacturer reported after the bell on Thursday that
its inventories were up 44% to $9.7 billion in the latest quarter
and its bottom line was pressured by higher discounts and freight
Shares started sliding in off-hours trading, and continued to
tumble in premarket trading on Friday as analysts cut their price
targets for Nike, but notably declined to downgrade the stock's
UBS analysts said in a research note that while Nike's latest
quarter shows some challenges in the near term, the company
continues to be a long-term outperformer as it accelerates its
consumer direct business and its business in China continues to
Analysts at Credit Suisse trimmed their price target to reflect
Nike's conservative guidance, but noted that there is "opportunity
in the dip" that the company's stock is experiencing.
JPMorgan analysts cut their price target based on the company's
earnings expectations, but said its brand momentum across markets
has been sustainable and provides insulation to macroeconomic
Analysts at Stifel said strong demand during the latest quarter
was overshadowed by Nike's inventory woes and foreign exchange
headwinds. But clearances pressures should reverse by fiscal year
2024, they said.
"Given Nike's track record for successfully navigating difficult
macro environments, we are comfortable extending our time horizon
for valuation to FY24," the Stifel analysts said in a note.
Wedbush analyst Tom Nikic also took on an optimistic tone. In a
note, he said that with Nike's latest guidance, the stock should
now move higher if growth in its Chinese business recovers,
inventory growth moderates, demand gets kick-started by upcoming
sporting events and consumers respond positively to new innovations
in its product lines.
"We do have confidence in [Nike's] ability to navigate choppy
waters and emerge more rapidly from the current disruption than
most other brands we cover," Mr. Nikic said.
Write to Dean Seal at email@example.com
(END) Dow Jones Newswires
September 30, 2022 14:12 ET (18:12 GMT)
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