Global leader in sports equipment and apparel,
) remains on our Neutral list with a target price of $66.00. Our
long-term recommendation is well supported by the Zacks Rank #3
Nike's strong portfolio of globally recognized brands - such
as Nike, Converse, Chuck Taylor, Hurley, All Star, One Star, Star
Chevron, and Jack Purcell - and its focus on innovation have
helped in strengthening its leadership position. Nike is striving
to find opportunities to expand its global footprint and augment
its market share through acquiring new brands, developing its
direct-to-customer business and divesting underperforming brands.
Taken together, these strategies position the company strongly
among competitors such as Adidas AG and
Brown Shoe Co. Inc.
Moreover, this footwear and athletic apparel retailer has
outperformed the Zacks Consensus Estimate in the trailing 4
quarters, recording an average beat of 9.5%. In the most recent
quarter, it posted an earnings surprise of 2.7% and a 27.0%
increase in earnings per share, aided by healthy top-line growth,
improved margins and lower share count. Net sales surged 7.0%
year over year, driven by the great demand for NIKE brand.
Apart from strong fourth-quarter results, Nike's growth
prospects appear promising. We believe the company's prudent
investment as well as strategic initiatives toward product
innovation and brand building will increase its customer base and
profitability. Going forward, we expect the company's top-line
growth to remain strong, given an increase in future orders.
On the flip side, rising commodity prices pose a challenge and
may undermine the company's future performance. In addition, we
expect sluggish discretionary spending and intense competition
amid rapidly changing customer preferences to dent Nike's future
prospects. Consequently, we prefer to keep to the sidelines at
Other Stocks Worth Considering
Other stocks that are worth a look in the sports retail
Deckers Outdoor Corp
). Both the companies carry a Zacks Rank #2 (Buy).
BROWN SHOE CO (BWS): Free Stock Analysis
CARTERS INC (CRI): Free Stock Analysis Report
DECKERS OUTDOOR (DECK): Free Stock Analysis
NIKE INC-B (NKE): Free Stock Analysis Report
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