© Reuters. Morgan Stanley sees a ‘slight beat’ forward for Nike (NKE)
By Sam Boughedda
Morgan Stanley analysts mentioned in a observe Monday that the agency sees Nike (NYSE:) barely beating third quarter 2023 consensus estimates.
The analysts, who’ve an Obese ranking on Nike, raised the agency’s value goal on the inventory to $140 from $138. They instructed traders {that a} “3Q EPS beat seems possible, although probably much less upside in comparison with final quarter.”
“Various knowledge factors sign upside potential to 3Q EPS: 1) Friends’ better-than-expected Europe outcomes (Puma, UAA, ADS, amongst others, & ~27% of NKE FY22 gross sales’), 2) encouraging intraquarter wholesale companion commentary on NKE’s ongoing model warmth & 3) NKE’s very conservative steering, which suggests a fabric 3Q topline slowdown & deteriorating profitability,” they wrote.
Alternatively, they acknowledged that “intraquarter channel checks recommend 1) broader NA sportswear demand has softened barely because the area returned to a push market, & 2) promotional exercise has worsened considerably greater than beforehand anticipated (as confirmed by Puma & ADS).”
Nevertheless, whereas they count on these dynamics to offset among the upside drivers, leading to Nike probably delivering much less EPS upside than the final quarter, Morgan Stanley believes some EPS upside remains to be achievable and {that a} steering increase is probably going.