Nike: Brand Is Well Positioned But Strong USD Should Modestly Hamper Revenue Growth, Says Sterne Agee

In a research report issued today, Sterne Agee analyst Sam Poser maintained a Buy rating on Nike (NYSE:NKE) with a $90 price target.

Poser commented: “Nike will continue to gain share worldwide due to the ongoing product innovation and massive dollars dedicated to R&D, marketing, and infrastructure. Basketball continues to accelerate in all geographies. Turnaround is well underway in Western Europe and there is progress in China. Multi-year midteens EPS growth will be driven by the combination of DTC growth, systems/production enhancements, and continued share repurchases.”

The analyst added, “We are forecasting 1Q15 EPS of $0.87 versus $0.86 LY, and a 12.0% revenue increase (on top of +7.7% LY) versus guidance of LDD growth. Based on our checks, Nike and Jordan footwear continue to be strong, driven by marquee basketball and fashion running. We expect GM to increase 75bps, in line with guidance, as higher ASPs, mix shift to higher margins products, and increased DTC penetration are partially offset by increased labor costs and FX. We expect SG&A to grow 22.2% and to delever by 181bps, due to timing of demand creation (spillover of World Cup spending). Nike will report 1Q15 results on September 25th AMC.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Sam Poser has a total average return of 20.6% and a 73.3% success rate. Poser has a -8.5% average return when recommending NKE, and is ranked #34 out of 3293 analysts.

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