Nike's shares collapse after conservative prospects, but analysts say "do not be fooled"


Shares of Nike Inc. fell 5.7% Friday after the global sports giant announced its budget forecast for the fourth quarter of 2019, which frightened investors, but analysts remain optimistic thanks to the solid fundamentals of the society.


NKE -6.61%

Third-quarter revenues were up, but fourth-quarter revenues would be seen as a pinch of about six percentage points, "which would result in revenue growth of less than a single figure," he said. Andrew Campion, Chief Financial Officer of Nike. earnings call, according to a FactSet transcript.

"Recall that in the fourth quarter of last year, the euro had approached $ 1.25 before depreciating to $ 1.15 in the first quarter of this fiscal year, a similar dynamic exists in the renminbi, "he said. The company expects monetary pressure to tighten significantly before the 2020 financial year.

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The news has tumbled the actions of Nike, dropping the Dow Jones Industrial Average

DJIA, -1.77%

. It also had an impact on Foot Locker Inc.

FL -4.86%

one of Nike's biggest sellers, whose shares fell by 4.6% during Friday trading.

Analysts at Susquehanna Financial Group led by Sam Poser are not worried.

"[D]Do not be fooled … the underlying dynamics remain incredibly strong, "analysts said. "Increasing digital prowess, a robust product portfolio and exceptionally clean inventories will continue to drive healthy revenue growth and neutral margins in the FX and geographic and geographic markets in the near future."

Susquehanna estimates that Nike's actions are positive with a target price of $ 100.

Cowen analysts say "Nike's execution is flawless", while maintaining their outperformance rating, while reducing their price target by $ 2 and bringing it back to $ 90.

Stifel's analysts find that, despite the overall strength of the brand and its gross margin potential, third quarter results were affected by comparisons with the previous quarter.

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"Coupled with expectations for Fiscal 2013, which disappointed published estimates and high expectations, we are not surprised by the pressure on equities," analysts said. "Despite this decline, we remain confident in the fundamental dynamics and opportunities for long-term value creation."

Stifel maintained its purchase price and price target of $ 96.

Some analysts have mixed their praises with a note of caution.

"We are maintaining our neutral score and we would see a better short-term entry closer to the middle of the $ 70, where Nike's short-term P / E [price-to-earnings] The premium ratio would be closer to the multi-year average, "wrote analysts at Baird.

Baird's price target for Nike shares is $ 87. Shares were trading at $ 83.30 on Friday.

And Instinet analysts have called the company's clothing "underperforming", with deceleration over two and three years.

Nevertheless, analysts believe that Nike shares are buying with a price target of $ 91, up from $ 85.

Nike's share price has risen 12% since the beginning of the year, which is about the 12.5% ​​gain recorded by the Dow Jones Industrial Average.


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