Deutsche Bank Maintains Buy On Nike, Increases PT To $95


In a research note issued today, Deutsche Bank analyst Dave Weiner maintained a Buy rating on Nike (NYSE:NKE) and increased his price target from $90 to $95, which represents a 19% upside from where the stock is currently trading.

Weiner wrote, “Raising on FY15 guidance, as mgmt. flows through its 1Q beat We are bumping our revenue and gross margin numbers for the year, in line with plan. Our EPS forecast shifts from $3.36 to $3.57 on 10.4% y/y rev. growth, +125 bp in GM, and +13.9% SG&A growth. For FY16, we are now at $4.10 based on 9.0% y/y revs., +90 bp of GM, and +9.5% SG&A. Importantly, we look for Nike to return to peak operating margin of 14.3% in FY16. Key takeaways from the call (details within) Beyond a strong F1Q which soundly beat the high-end of expectations, NKE stock remains interesting as we get a more visible roadmap in to how the P&L returns to peak(+) historic operating margin. With current LTM OM at 13.4%, we think that there are plenty of drivers to return, and possibly surpass the 14.3% realized in FY11 (May 2011). Assisting of course is impressive top-line momentum (+15% y/y cc in 1Q, +LDD% 2Q plan, Futures of +14%, & +LDD% FY plan) which is cleaning house globally, particularly in Basketball, women’s, and DTC. While NTM P/E of 22.7x sits above the 3Y avg. of 20.4x, brand/sector momentum & the potential for peak(+) OM frames enthusiasm.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Dave Weiner has a total average return of 4.2% and a 50% success rate. Weiner has an 8.9% average return when recommending NKE, and is ranked #1333 out of 3321 analysts.

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