Financial Trading Blog
Stock of the day 22/09/2015 – Nike Inc
Can that trend continue with its Q1 2016 earnings release on Thursday?
After starting 2015 at $96.58 Nike has been nearly unstoppable, with a string of fantastic quarterly reports and updates leaving the stock at a current trading price of $116.59 (IT-Finance.com), just below its all-time high of $117.50 at the beginning of August.
(Source: IT-Finance.com 22/09/2015)
Its most recent earnings release came at the end of June, and maintained the stellar form that has defined its 2015. It saw a 4.8% jump in fourth quarter revenue to $7.8 billion, alongside earnings per share of $0.98 compared to $0.78 the year before, both figures beating Wall Street’s estimates. These figures helped Nike post a 10% rise in full year revenue to $30.6 billion, and came on top of news earlier in June that the company had signed a $1 billion deal to become the official partner of the NBA, beginning in 2017.
In terms of its first quarter fiscal 2016 results, analysts are expecting Nike to post earnings per share of $1.19 alongside a 2.8% year-on-year growth in revenue to $8.2 billion. That revenue growth is a sharp come-down from the 15% jump seen in Q1 2015; however, that figure was boosted by the 2014 FIFA World Cup, with no equitable event this year to match the sales-surge caused by the world’s premier footballing event.
Investors will also have to watch out for the effects of the stronger dollar, a bugbear of Nike’s in the past few quarters, alongside the impact of China’s continual slowdown (and the recent chaos in August) on its full year outlook.
Nike has a consensus rating of ‘Buy’ with an average target price of $117.66.
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