Nike Inc.’s stock rose 10.2% in Wednesday trading after becoming one of the few companies to provide guidance, predicting that it will raise full-year earnings from high single digits to low double digits.
Stock performance provides a pump to consumer ETFs.
Guides the revenue for the year to be “flat”.
Nike’s first-quarter profit and earnings exploded past analyst expectations for the “Ho Hum” quarter.
Tillard’s Inc. Nike has made some business decisions such as reducing wholesale supply from retailers such as DTS.
And Amazon.com Inc.’s AMZN,
Japos e-commerce site and an employee restructuring, which the company says could have long-term consequences.
The athletic company forecasts flat year-over-year margins and flat sales, general and administrative costs.
“Stronger demand than expected for our brands will be controlled in the near future due to the distribution decisions we have made in the face of the epidemic, and growth in the second half will be significantly higher than the previous year,” said Chief Financial Officer Matthew. According to Factset, the revenue call is friend.
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“Our overall margin outlook will continue to be a priority activity to return to normal inventory levels at the end of Q2. In the second half, we expect to see continued improvement in full price sales, but we expect the continuation of higher markdown activity in our factory stores to maintain exchange rates on lower traffic.”
The analyst reaction was enthusiastic, with several research groups raising their price targets on Nike stocks.
“Nike’s 1Q pulse demonstrates how a company’s size and size can deepen the long-term competitive edge of a customer’s wallet across research and development and marketing, expanding its competitive portfolio from athletic counterparts. Wrote BMO capital market analysts led by Simeon Seagal.
BMO raises Nike stock price from $ 100 with target price of target 134.
“Clearly stocks are expensive, but they are expensive for a reason, and we expect them to continue to add.”
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UPS analysts think the Nike role could continue to perform better. Shares have risen 26% in the past three months, compared to the Dow Jones Industrial Average DJIA’s 4.6% decline.
To date, Nike’s share has risen nearly 27%.
“Nike’s transition to digital sales is happening much faster than we expected,” say analysts led by Jay Soul. “Importantly, we believe this change is just beginning and will pay off better sales growth and margin expansion in the coming years than expected.”
UPS rates Nike stock purchase with a price target of 2 152, ranging from 7 127.
Nike’s price target was raised from $ 130 to $ 150 at the Bank of America. Cowan analysts raised their price target from 4 134 to 5 145. Raymond James raised its price target from $ 1,121 to $ 140.
“Performance demonstrates that Nike’s innovation and digital-led strategies are paying off in the current environment, while organizational performance, improved fulfillment and renewals on advertising spending may inspire confidence in multi – year margin efficiency,” Byrd wrote in a note.
Baird raised its price target from $ 115 to $ 5,135. However, analysts say Nike’s role is neutral and cautious.
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“Although highly encouraged, we see some risk of reversing sentiment against management’s restructured long-term goals and avoiding chasing stocks near the deadline.”