What to expect from Nike’s first quarter results on Thursday

Nike, the world’s largest seller of athletic footwear and apparel, is expected to post tax profit of $ 1.12 per share in the first quarter, representing about 18% year-over-year growth , down from $ 0.95 per share in the same period a year ago. .

The Beaverton, Oregon-based shoe retailer is reportedly posting year-over-year revenue growth of more than 18% to $ 12.6 billion. Over the past four quarters, on average, Nike has beaten earnings estimates by more than 55%.

According to ZACKS Research, for fiscal 2022, the company expects double-digit revenue growth to exceed $ 50 billion due to strong customer demand across all of its segments.

The company expects revenue growth in the first half of fiscal 2022 to be higher than in the second half. The exchange rate is expected to be a positive wind in fiscal 2022, generating 70 basis points of gains, ZACKS Research added.

Nike shares have jumped more than 10% so far this year, but the stock closed 0.75% lower at $ 156.42 on Friday.

Analyst comments

“Investors are focusing on the impact of plant closures in Vietnam on the revenue forecast for the year. Our analysis and management. the conservatism of advice suggests minimal risk. But a high valuation requires quarters of beating and rising – a pullback in stock prices is possible and we are long on any weakness. reiterate overweight; raise the target price to $ 221, ”noted Kimberly Greenberger, equity analyst at Morgan Stanley.

“Nike (NKE) is trading at the high end of its all-time valuation range, and investors are expecting quarterly beats and forecast increases. Unchanged or lowered fiscal year guidance on temporary headwinds caused by Vietnam could cause stocks to pull back. We would be buyers on any potential weakness.

Nike stock price forecasts

Twenty-five analysts who have offered stock quotes for Nike in the past three months have forecast a 12-month average price of $ 187.26 with a high forecast of $ 221.00 and a low forecast of $ 168.00.

The target average price represents a change of 19.72% from the last price of $ 156.42. Of those 25 analysts, 21 rated “Buy”, three rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $ 221 with a high of $ 410 in a bullish scenario and $ 127 in a worst-case scenario. The company assigned a rating of “overweight” to the seller’s inventory of shoes and clothing.

Several other analysts have also updated their stock market outlook. Cowen and Company raised the target price to $ 196 from $ 181. Oppenheimer raised the price target to $ 195 from $ 150. HSBC raised the target price to $ 205 from $ 162.

“The disruption due to COVID-19, supply chain pressure and China continue to escalate. Our contacts across the global supply chain suggest that Vietnam could reopen by October. Port congestion and freight headwinds could ease through 2H 2022 and the industry’s 10% valuation correction has improved the risk / reward ratio, ”noted John Kernan, equity analyst at Cowen.

“We are reducing our estimate of Nike sales for fiscal 22 by 300 basis points to reach 9% growth with a robust recovery in fiscal 23.”

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