Can you feel the ground moving beneath your feet? Shares of Nike (NYSE:NKE) soar nearly 11% in Friday’s trading session after the athletic footwear and apparel giant delivered fiscal fourth-quarter financial results that crushed Wall Street’s expectations in an upside surprise.
However, despite the earnings beat, its still difficult for analysts to justify owning the stock.
In a research note issued toady, Canaccord analyst Camilo Lyon reiterated a Hold rating on NKE, with a price target of $78, which implies an upside of 9% from current levels. (To watch Lyon’s track record, click here)
Lyon commented, “All the signs are pointing to progress across the three elements of its “triple double” strategy: 2x innovation (healthy product pipeline coupled with increasing scale of trending platforms), 2x direct (NikePlus membership, SNKRS app, differentiated store experience), and 2x speed (scaling express lane). That said, this progress is appropriately reflected in NKE’s premium valuation and the stock is being afforded, in our opinion. Furthermore, increasing uncertainty around the global trade policies also warrant some caution approaching the July 6th deadline.”
B.Riley FBR analyst Susan Anderson largely seems to echo Lyon’s neutral stance. Anderson reiterates a Neutral rating on NKE stock, with a price target of $76, which represents a potential upside of 6% from where the stock is currently trading. (To watch Anderson’s track record, click here)
Anderson noted, “Most noteworthy in the quarter was the positive inflection in North America, fueled by new innovation and increasing Nike Direct, which we believe should continue momentum as we head into FY19. […] We like Nike’s innovation pipeline, int’l runway, LT margin catalysts, and the turn we are seeing in North America—but we remain on the sidelines given valuation.”
Out of the 32 analysts polled by TipRanks in the past 12 months, 14 rate Nike stock a Buy, 17 rate the stock a Hold and 1 recommends Sell. With a return potential of 8%, the stock’s consensus target price stands at $77.17.