Nike Inc. (NYSE: NKE) has confirmed its earnings release date, which will be on Monday, December 20, 2021, after markets close.
What to look for
Earnings: Stockearning’s Estimated EPS for the current quarter under review is $0.62 per share, which is a 20.51% drop from the previous quarter. Estimates indicate that the company will post earnings of $3.56 per share for the full year. Historical EPS Performance indicates that the company has in the past 12 quarters topped estimates ten times (83%) and missed twice (16%).
Revenue: For fiscal Q2 2022, the company expects revenue of $11.23 billion, a 0.09% drop from a year ago. For the full year, the company expects to earn revenue of $47.11 billion, representing a 5.76% improvement from last year. The company reported net sales of $12.2 billion in the first quarter, a 16% YoY increase. In addition, Nike Direct sales improved 28% to $4.7 billion.
Stock movement: Since the last earnings release, Nike shares have gained 6.7%. Nike shares have been UP 26 times in the last 46 quarters following the earnings release. So, the historical price reaction suggests a 56% probability of the share price going UP once Nike reports its fiscal Q2 2022 quarterly earnings. According to the Stockearning algorithm, the predicted first-day move is 5%, while the predicted move on the seventh day is 5%.
What analysts are saying
Bank of America analyst Lorraine Hutchinson raised her target price for Nike's apparel and athletics shoe company from $160 to $170 but reiterated the "Hold" rating. In a research note, the analyst said Adidas's mixed Q3 earnings report offered incremental visibility on two important debate issues for Nike, which include recovery in china and the global supply chain for sportswear. Lorraine said that much hasn't changed since the company released its Q1 2022 earnings in September, changing the firm's belief that supply chain disruptions are reflected in Nike’s reduced fiscal 2022 guidance. The analyst added that the price target increase reflects “peer multiple expansion and our confidence in the fiscal 2022 outlook.”
Morningstar analyst David Swartz likes Nikes, and although he feels the stock is overvalued, he puts his value at $128. Last month Swartz wrote that they consider Nike a leader in the athletic apparel sector, and they are optimistic that the company will overcome the Covid-19 challenges despite the current supply chain issues. Swartz said that Morningstar's wide-moat rating on Nike is based on intangible brand assets, and it will keep a premium pricing and create economic returns for around 20 years.
Goldman Sachs analyst Kate McShane commenced coverage of Nike with a price target of $172 and a “Buy” rating. McShane sees a “healthy industry backdrop with a company-specific continued focus in innovation to drive growth.” The analysis told investors that the company has room to expand its direct-to-consumer programs, which is likely to boost gross margins with time. Additionally, McShane contends that Nike’s high cash balance will allow for more investment and shareholder returns.
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