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Analysts Positive On Nike Shares Ahead of Q2 Earnings Release

Sam Boughedda
Sam Boughedda trader
Updated 14 Dec 2022

Nike (NYSE: NKE) shares are down over 32% in 2022, but analysts at Citi and Morgan Stanley are positive on the stock ahead of its fiscal second quarter 2023 earnings release on December 20.

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On Tuesday, Citi analyst Paul Lejuez raised the firm’s price target on Nike to $115 from $93. Despite maintaining a Neutral rating on the shares, Lejuez opened a “30-day positive Catalyst Watch” on Nike as he expects the company’s earnings results to beat consensus based on stronger sales and margins.

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The analyst told investors that with Nike and its retail partners highly promotional in the quarter, consumers responded well, and the sportswear giant made significant progress working through excess inventory. In addition, the analyst believes newness in footwear drove strong full-priced demand, while he also leans more positively due to a better inventory position and outlook in China. 

Elsewhere on Tuesday, Nike’s price target was raised to $127 from $120 at Morgan Stanley by analyst Alex Straton, maintaining an Overweight rating on the stock.

Straton believes Nike’s upcoming earnings report could “slightly beat Street forecasts” due to stronger-than-expected topline results from global brands such as Capri Holdings, Tapestry, and On Holding and encouraging intra-quarter commentary, mainly from Skechers. 

The analyst acknowledged that the strong demand and exit rate noted on Nike’s fiscal Q1 earnings call will likely continue through the quarter; he added that any potential topline upside could be offset by ongoing China softness as well as average selling price pressure from increased discounting in North America. This has resulted in Straton’s estimates being left in-line with Street expectations for total revenue in the second quarter. The analyst stated that the 2023 set-up for Nike “remains attractive.”

According to TipRanks, out of 27 analysts, 17 have a Buy rating on Nike, with nine at Hold and one at Sell.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Sam Boughedda
Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.