Financial Trading Blog
Stock of the day 24/06/2016 – Nike Inc
Since its 2-for-1 stock split back in December things haven’t been looking great for the legacy sports brand. From a 2016 opening price of $61.03 the stock had slipped below $55 by the beginning of February, harmed by the general market malaise that greeted the start of the year. Nike’s price did then begin to pick up heading into March, and by the 22nd of the month was at a year high of $65.44.
(Source: IT-Finance.com 24/06/2016)
However, Nike’s second quarter trading statement soon changed all that. Diluted earnings from 22% year-on-year to $0.55, significantly higher than the $0.48 forecast by analysts; however, although revenue jumped 8% to $8.03 billion that was still below the expected $8.2 billion, news that took the sting out of the company’s earnings surprise. Futures orders also missed forecasts, though they still climbed 10% and 23% in North America and Western Europe respectively (once currency changes are stripped out).
The slight air of disappointment around these figures (with Nike a victim of its own high standards) lopped off nearly 4% in value in the immediate aftermath of the update, and put the stock on track to fall all the way to a current trading (and pre-Brexit) price of $54.13 (IT-Finance.com, 24/06/2016).
In terms of the company’s fourth quarter figures next Tuesday analysts are expecting Nike to post earnings per share of $0.48 alongside revenue of $8.28 billon, up from $7.8 billion this time last year. Investors will also be keen so hear projections for Nike’s fiscal 2017, as well as an outline of the impact of Euro 2016 and the Rio Olympics.
Nike Inc has a consensus rating of ‘Buy’ with an average target price of $70.10.
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