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Nike: time to buy?
2020-06-24 • Updated
Whether you like to trade stocks or not, we recommend you not to skip this event. Nike, the famous American footwear producer, will publish its earnings report for the fourth quarter fiscal 2020 (March-May period) on Thursday, after the close of the market at 23:15 MT time. Analysts’ optimism about the upcoming data pushed Nike’s stock higher yesterday. Should we see it as “bullish”, too? Let’s find out.
The company has been surviving the pandemic pretty well. Although most of Nike’s stores across the world were closed during the reported period, the demand remained high due to online sales and trends for a healthy lifestyle. The reopening of stores in Greater China, South Korea, European countries, and the United States is a good factor, too. The company has been undertaking safety protocols, including social-distancing and sanitization.
According to the average estimate, EPS reached 0.09 in the fourth quarter, while revenue was at $7,295. Traditionally, higher-than-expected indicators will be bullish for stock’ price. It’s worth mentioning that Nike did not provide any official financial forecasts, so the actual figures may surprise.
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This week, several analytical companies renewed their forecasts and raised price targets for Nike’s stock.
According to JPMorgan, the stock is overweight. The price target lies at $104. Wells Fargo has a similar view on the stock, targeting it at $99.
UBS thinks that the stock is a “buy” with the price target at $122.
Both Raymond James and Cowen & Co. forecast the stock to outperform with price targets at $115 and $110, accordingly.
The most bullish expectation belongs to Susquehanna, which sees Nike’s stock at $130.
To sum up, we can see that the bullish outlook for this stock dominates among analytical companies. We need to take this fact into account, but don’t consider it as absolute truth.
The outlook of Nike's stock
On Tuesday, the stock gapped towards its all-time high at $103.9-104.7. In case of a bullish scenario, the price of a stock will break these levels and target new highs. Alternatively, we will see the fall towards $99.6. The breakout of this level and a trendline will pull Nike's stock even lower to $96.1.
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