CREDIT SUISSE STICKS WITH NIKE DESPITE HEADWINDS
Nike Inc. has been good to investors, very good. The stock rose more than 70 per cent during a two- year run that ended in the latter part of March 2016. However, Nike shares are down about 13 per cent year to date, as the company faces meaningful headwinds, particularly a sales slowdown in North America.
Under Armour Inc. and Adidas AG are also gaining momentum in the footwear category for the first time in years, and Nike is seeing pricing challenges emerge.
Credit Suisse analyst Christian Buss looked at some online trends for these brands. He found that Nike’s mentions fell six per cent year-over-year, while Adidas saw a 40-per-cent gain and Under Armour a 22-per-cent increase. Despite these hurdles, the analyst is confident Nike can maintain revenue growth of seven to eight per cent. That’s why he’s sticking with an outperform rating and US$68 target on the stock, which represents upside of 25 per cent.