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The Zacks Analyst Blog Highlights: Nike, Adidas, Under Armour, Lululemon and Gap
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For Immediate Release
Chicago, IL – August 21, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Nike (NKE - Free Report) , Adidas (ADDYY - Free Report) , Under Armour (UAA - Free Report) , Lululemon (LULU - Free Report) and Gap (GPS - Free Report) .
Nike saw its stock price surge over 3% Monday to touch a new 52-week high on the back of an analyst upgrade. The question is what has investors excited about the sportswear giant as it aims to fight off the likes of Adidas, and should you buy NKE stock as it hovers at a new all-time high?
Upgrade
Susquehanna analysts raised their NKE price target from $78 per share to $93 per share, which marked a roughly 17% upside from Nike’s closing price on Friday of $79.75 per share. The firm also upgraded Nike stock from “neutral” to “positive” on Monday, citing the Oregon-based company’s growing market share. Susquehanna noted that Nike has been able to gain market share from German rival Adidas.
Much of the upgrade focused on Nike’s ability to adapt in the new retail age and reach consumers through its massive new e-commerce push, which includes initiatives such as its SNKRS app and NikePlus memberships, as well as high-level partnerships with online retailers.
“We contend that the clean inventories in the marketplace, the growing [direct-to-consumer] business, and new innovative product will drive more full price selling than [Nike's] guidance infers, primarily driven by the improvement in the North American market," Susquehanna analyst Sam Poser wrote in a note to clients.
Nike Overview
Nike was able to return to growth in North America last quarter after experiencing declines in its home market for nearly a year. The company has been able to turn things around through a massive direct-to-consumer push. The firm’s quarterly revenues climbed by 13% to hit $9.79 billion, with North American sales up 3% to hit $3.88 billion.
Nike’s sales in Greater China skyrocketed 35% to $1.47 billion. Investors should also note that Nike’s growth in Europe and China outpaced Adidas’ expansion in those two vital markets during its most recent quarter. Nike also said on its earnings call that Nike Direct drove over 90% of its growth for the year, with digital sales up 41% in Q4.
Nike, like other retailers, has tried to move on from a wholesale focus and an overreliance on big-box stores. The shift is not only good business as consumers change their shopping habits, but it should also help make Nike a much more profitable company in the long-run.
Nike has also been successful in the quickly-growing athleisure market, unlike Under Armour. And the company has vowed to make an even bigger jump into athleisure in order to take on Lululemon, Gap and others.
Price Movement
Shares of Nike have climbed roughly 156% over the last five years, which outpaces its industry’s 55% jump and the S&P 500’s 78% surge. NKE experienced a huge amount of turbulence over the last three years, up just around 54%. But, over the last 12 months, shares of NKE have surge once again, and now sit near a brand new high of $82.33 per share.
Valuation
Moving on, Nike stock is currently trading at 29.4X forward 12-month Zacks Consensus EPS estimates, which marks a premium compared to Adidas’ 22.3X as well as its industry’s 25.2X. NKE has also traded as low as 21X over the last year, with a one-year median of 25.9X.
Plus, investors will see that Nike stock is currently trading near both its one-year and its five-year high. Therefore, NKE’s valuation picture appears a bit stretched at the moment.
Outlook
Looking ahead, NKE is projected to see its quarterly revenues pop by over 8.6% to hit $9.85 billion, based on our current Zacks Consensus Estimate. Nike’s fiscal 2019 revenues are expected to climb by 7.8% to $39.22 billion.
At the other end of the income statement, Nike’s quarterly earnings are expected to jump by 7% to $0.61 per share, while its full-year EPS figure is projected to pop by 7.8%. Nike has experienced mixed earnings estimate revision activity over the last 60 days, which helps it earn its Zacks Rank #3 (Hold).
Nike stock seems worth considering at the moment, but it might be better to wait for NKE to cool off just a bit since its valuation picture is not the best right now as it sits at a new high.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Nike, Adidas, Under Armour, Lululemon and Gap
For Immediate Release
Chicago, IL – August 21, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Nike (NKE - Free Report) , Adidas (ADDYY - Free Report) , Under Armour (UAA - Free Report) , Lululemon (LULU - Free Report) and Gap (GPS - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday’s Analyst Blog:
Time to Buy Nike (NKE - Free Report) Stock at New High?
Nike saw its stock price surge over 3% Monday to touch a new 52-week high on the back of an analyst upgrade. The question is what has investors excited about the sportswear giant as it aims to fight off the likes of Adidas, and should you buy NKE stock as it hovers at a new all-time high?
Upgrade
Susquehanna analysts raised their NKE price target from $78 per share to $93 per share, which marked a roughly 17% upside from Nike’s closing price on Friday of $79.75 per share. The firm also upgraded Nike stock from “neutral” to “positive” on Monday, citing the Oregon-based company’s growing market share. Susquehanna noted that Nike has been able to gain market share from German rival Adidas.
Much of the upgrade focused on Nike’s ability to adapt in the new retail age and reach consumers through its massive new e-commerce push, which includes initiatives such as its SNKRS app and NikePlus memberships, as well as high-level partnerships with online retailers.
“We contend that the clean inventories in the marketplace, the growing [direct-to-consumer] business, and new innovative product will drive more full price selling than [Nike's] guidance infers, primarily driven by the improvement in the North American market," Susquehanna analyst Sam Poser wrote in a note to clients.
Nike Overview
Nike was able to return to growth in North America last quarter after experiencing declines in its home market for nearly a year. The company has been able to turn things around through a massive direct-to-consumer push. The firm’s quarterly revenues climbed by 13% to hit $9.79 billion, with North American sales up 3% to hit $3.88 billion.
Nike’s sales in Greater China skyrocketed 35% to $1.47 billion. Investors should also note that Nike’s growth in Europe and China outpaced Adidas’ expansion in those two vital markets during its most recent quarter. Nike also said on its earnings call that Nike Direct drove over 90% of its growth for the year, with digital sales up 41% in Q4.
Nike, like other retailers, has tried to move on from a wholesale focus and an overreliance on big-box stores. The shift is not only good business as consumers change their shopping habits, but it should also help make Nike a much more profitable company in the long-run.
Nike has also been successful in the quickly-growing athleisure market, unlike Under Armour. And the company has vowed to make an even bigger jump into athleisure in order to take on Lululemon, Gap and others.
Price Movement
Shares of Nike have climbed roughly 156% over the last five years, which outpaces its industry’s 55% jump and the S&P 500’s 78% surge. NKE experienced a huge amount of turbulence over the last three years, up just around 54%. But, over the last 12 months, shares of NKE have surge once again, and now sit near a brand new high of $82.33 per share.
Valuation
Moving on, Nike stock is currently trading at 29.4X forward 12-month Zacks Consensus EPS estimates, which marks a premium compared to Adidas’ 22.3X as well as its industry’s 25.2X. NKE has also traded as low as 21X over the last year, with a one-year median of 25.9X.
Plus, investors will see that Nike stock is currently trading near both its one-year and its five-year high. Therefore, NKE’s valuation picture appears a bit stretched at the moment.
Outlook
Looking ahead, NKE is projected to see its quarterly revenues pop by over 8.6% to hit $9.85 billion, based on our current Zacks Consensus Estimate. Nike’s fiscal 2019 revenues are expected to climb by 7.8% to $39.22 billion.
At the other end of the income statement, Nike’s quarterly earnings are expected to jump by 7% to $0.61 per share, while its full-year EPS figure is projected to pop by 7.8%. Nike has experienced mixed earnings estimate revision activity over the last 60 days, which helps it earn its Zacks Rank #3 (Hold).
Nike stock seems worth considering at the moment, but it might be better to wait for NKE to cool off just a bit since its valuation picture is not the best right now as it sits at a new high.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.