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NKE

Nike

$52.21

-0.0915 (-0.17%)

, ADDYY

adidas

$112.54

-0.08 (-0.07%)

10:29
10/19/17
10/19
10:29
10/19/17
10:29

Goldman Sachs cuts Nike rating ahead of investor day on excess inventory

This morning, Goldman Sachs analyst Lindsay Drucker Mann downgraded Nike to Neutral as she expects shares to trade in a range as the company works through excess inventory in the U.S. Further, the analyst believes Nike's upcoming investor day is unlikely to be a positive catalyst, an opinion shared by her peer at Citi, who also sees it as likely to be a neutral event. MOVING TO THE SIDELINES: In a research note to investors this morning, Goldman Sachs' Mann downgraded Nike to Neutral from Buy, with an unchanged price target of $54. The analyst expects shares to trade in a range as Nike works through excess inventory in the U.S. While the underpinnings of the company's business remain compelling, driven by an opportunity to further consolidate market share in the growing athletic apparel and footwear market, near-term dynamics are challenging with an inventory overhang in the U.S. hampering Nike's ability to "reset" the market, she noted. Additionally, Mann believes that beyond the company's domestic overhang, there are incremental signs of weakness emerging overseas, where it generates around half of sales. The analyst also pointed out that she views next week's investor day as an opportunity for management to lower its multiyear growth targets, which look stretched in the face of industry headwinds. While this event may not be an explicit negative catalyst, it is unlikely to be a positive event, she contended. INVESTOR DAY LIKELY 'NEUTRAL': Earlier this week, Citi analyst Kate McShane had also told investors that she believes Nike's investor day on October 25 will likely be a neutral event for the shares. The analyst argued that the company's previous long-term target of $50B in revenue by fiscal year 2020 is at risk. While she expects long-term targets to be pushed out, this reduction seems likely anticipated. Additionally, McShane noted that Nike shares are down 15% off of year-highs amid ongoing concerns around a slowdown in North America and improved momentum from competitor adidas (ADDYY). She reiterated a Buy rating and a $65 price target on Nike's shares. DISCOUNTS SIGNAL TROUBLE: Last week, Bloomberg reported that while Nike traditionally has not relied on discounts until now, the sneaker giant had announced a 48-hour sale of as much as 40% on more than 200 items on its website, which the company also advertised through Groupon (GRPN) site. The markdowns may signal trouble and come as teens shy away from Nike and opt for rivals adidas, the publication noted, citing a survey released by Piper Jaffray. PRICE ACTION: In morning trading, shares of Nike are fractionally higher at $52.33. Over the last three months the Dow member's stock has fallen by over 9%.

NKE

Nike

$52.21

-0.0915 (-0.17%)

ADDYY

adidas

$112.54

-0.08 (-0.07%)

GRPN

Groupon

$5.00

0.05 (1.01%)

  • 25

    Oct

  • 01

    Nov

  • 16

    Nov

NKE Nike
$52.21

-0.0915 (-0.17%)

10/19/17
GSCO
10/19/17
DOWNGRADE
Target $54
GSCO
Neutral
Nike downgraded to Neutral from Buy at Goldman Sachs
Goldman Sachs analyst Lindsay Drucker Mann downgraded Nike to Neutral with an unchanged price target of $54. The shoemaker closed yesterday up 30c to $52.30. The shares will trade in a range as Nike works through excess inventory in the U.S. and next week's investor day is unlikely to be a positive catalyst, Mann tells investors in a research note. The analyst believes the valuation remains supported in the low-20s price-to-earnings ratio.
10/16/17
COWN
10/16/17
NO CHANGE
COWN
Amazon will price activewear aggressively, may enter babies, says Cowen
Cowen analyst John Kernan says conversations over the weekend with supply chain contacts indicate Amazon.com (AMZN) will be aggressive with pricing in the activewear market and is sourcing from similar fabric suppliers as Nike (NKE), lululemon (LULU) and Under Armour (UAA). Contacts also suggest Amazon may develop intimates, baby and basics, which is a risk to Hanesbrands (HBI) and Carter's (CRI), Kernan tells investors in a research note dated yesterday titled "Amazonian Apparel Is A Clear Negative For Mass Market Brands." He believes Amazon's announcement Friday that it will source, design and market an athletic apparel line is a "clear negative for the mass market area of the category." It will create additional supply and deflation in a category that already has "inventory piled high in the U.S. wholesale channel," Kernan argues.
10/16/17
SBSH
10/16/17
NO CHANGE
Target $65
SBSH
Buy
Nike investor day likely a neutral event, says Citi
Citi analyst Kate McShane believes Nike's (NKE) investor day on October 25 will likely be a neutral event for the shares. The company's previous long-term target of $50B in revenue by fiscal year 2020 is at risk, McShane tells investors in a research note. She expects long-term targets to be pushed out, but believes this reduction is likely anticipated. The analyst notes Nike shares are down 15% off of year-highs amid ongoing concerns around a slowdown in North America and improved momentum from competitor adidas (ADDYY). McShane keeps a Buy rating on Nike with a $65 price target.
10/05/17
PIVT
10/05/17
INITIATION
Target $56
PIVT
Hold
Nike initiated with a Hold at Pivotal Research
Pivotal Research analyst Mitch Kummetz initiated Nike with a Hold and $56 price target saying the company is susceptible to losing additional market share, specifically to adidas, despite efforts to implement a new strategy to drive its next phase of growth.
ADDYY adidas
$112.54

-0.08 (-0.07%)

09/19/17
JEFF
09/19/17
NO CHANGE
JEFF
Jefferies cuts Nike target, says share loss to adidas accelerating
Survey work shows Nike (NKE) is ceding market share to adidas (ADDYY) in both Europe and the U.S. at an accelerating pace, especially in running, Jefferies analyst Randal Konik tells investors in a research note. The analyst's webscrape analysis shows Nike has 35 shoes in the top 60 sellers versus 52 last year, while adidas has risen to 24 styles, versus just 2 last year. Konik expects downward estimate revisions and multiple compression for Nike. He lowered his estimates for the company and cut his price target for the shares to $49 from $60. The shoemaker closed yesterday down 37c to $53.50. The analyst reiterates a Hold rating on the name. Konik also views Nike's eroding market share as negative for both Foot Locker (FL) and Finish Line (FINL).
09/26/17
BERN
09/26/17
NO CHANGE
BERN
Survey respondents more likely to buy Nike for fashion/function, says Bernstein
Bernstein analyst Jamie Merriman says he and his firm surveyed 1000 people in the U.S. in July, asking them about 22 athletic apparel and footwear brands. At the athletic apparel and footwear category level, 58% of survey respondents expect to spend about the same amount on the category as they have spent over the last 12 months, while 28% expect to spend more and 14% expect to spend less, he notes. Among those who had shopped the brands in the LTM, the analyst says theintention to purchase more in the NTM was similar across Nike (NKE), adidas (ADDYY) and Under Armour (UAA), while Lululemon (LULU) customers reported the highest intention to purchase more going forward. Additionally, Merriman said respondents were most likely to purchase Nike, relative to other brands, for a combination of fashion and function.
09/22/17
PIPR
09/22/17
NO CHANGE
Target $53
PIPR
Neutral
Nike bulls in denial about resurgence of adidas, Piper Jaffray says
Piper Jaffray analyst Erinn Murphy says her intra-quarter reads point to ongoing deceleration in Nike (NKE) momentum, increasing concern around the Jordan brand, which represents 10% of sales, and intensifying promotional pressure on the category domestically. Bulls on Nike are still denying the durability of adidas' (ADDYY) resurgence, Murphy tells investors in a pre-earnings research note. The analyst believes adidas' market share gains have "longer growth sustainability." For Nike's Q1 results on September 26, Murphy sees revenue as inline "at best" and gross margin worse than expected. The analyst, however, sees cost controls driving an earnings beat. Murphy also sees risk to Nike's outlook for Q2. She keeps a Neutral rating on the shares with a $53 price target.
GRPN Groupon
$5.00

0.05 (1.01%)

10/17/17
GABE
10/17/17
INITIATION
Target $7
GABE
Buy
Groupon initiated with a Buy at Gabelli
Gabelli analyst Matthew Trusz initiated Groupon with a Buy and $7 price target. The analyst said Groupon's large North American user base is growing 15% annualized, free cash flow growing nearly 20% per year, has the dominant property in the attractive local commerce market, and its card-linked offers are a game-changer that materially improve ease of use for both customers and merchants.
10/17/17
10/17/17
INITIATION

On The Fly: Top five analyst initiations
Catch up on today's top five analyst initiations with this list compiled by The Fly: 1. Groupon (GRPN) initiated with a Buy at Gabelli. 2. HP Enterprise (HPE) initiated with a Hold at Pivotal Research. 3. Celgene (CELG) initiated with an Outperform at Bernstein. 4. Aerohive (HIVE) initiated with a Buy at Craig-Hallum. 5. Sprouts Farmers Market (SFM) initiated with a Positive at Susquehanna. This list is just a portion of The Fly's analyst coverage. To see The Fly's full Street Research coverage, click here.
10/18/17
RILY
10/18/17
NO CHANGE
Target $6.3
RILY
Buy
Groupon price target raised to $6.30 from $5.50 at B. Riley
B. Riley analyst Sameet Sinha raised his price target for Groupon to $6.30 and keeps a Buy rating on the shares. Channel checks indicate the company's ad campaign is resonating well with customers and driving demand in seasonally strong Q4, Sinha tells investors in a research note.
10/16/17
10/16/17
UPGRADE

On The Fly: Top five analyst upgrades
Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. Apple (AAPL) was upgraded to Overweight from Sector Weight at KeyBanc and Pacific Crest. 2. Infinera (INFN) upgraded to Neutral from Sell at Citi with analyst Stanley Kovler saying the risk/reward is balanced with material downward revisions to estimates likely limited. 3. AstraZeneca (AZN) upgraded to Outperform from Neutral at Credit Suisse with analyst Rebekah Harper saying that after recent pipeline success for Tagrisso and Imfinzi, she sees a marked improvement in its strategic position in pricing power and replacement power. 4. KKR (KKR) upgraded to Buy from Neutral at Goldman Sachs with analyst Alexander Blostein citing a more stable, improving mix of balance sheet investments, lower concentration in large public holdings, and increased mix towards private holdings. 5. Groupon (GRPN) upgraded to Market Perform from Underperform at Cowen with analyst Thomas Champion saying he believes the shares currently look more attractive given the company's new management and cost controls, improved North America results, and balanced expectations for the second half of 2017. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

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