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Is Nike (NKE) Stock a Buy Ahead of Earnings? 3 Analysts Weigh In.

  • Nike (NKE) is gearing up to issue its fiscal fourth-quarter results today.
  • Some traders are undoubtedly jittery about supply-chain problems, inflation and other issues.
  • Still, there are analysts on Wall Street with optimistic ratings on NKE stock.
NKE stock - Is Nike (NKE) Stock a Buy Ahead of Earnings? 3 Analysts Weigh In.

Source: TY Lim / Shutterstock.com

Footwear retailer Nike (NYSE:NKE) is preparing to release the company’s fiscal fourth-quarter 2022 results today. Consensus is elusive on Wall Street, but some analysts seem willing to set their concerns aside and issue positive ratings on NKE stock.

Even though the bulk of earnings season has already passed, there are still some players getting ready to report. Among them is Nike, America’s most famous sneaker seller. Thus, elite financial experts are weighing in on Nike’s prospects.

Some folks might be nervous as Nike gears up to release its quarterly data. After all, the company is dealing with supply-chain constraints, Covid-19 in China and, of course, inflation.

Unfortunately, Nike’s 1.08% forward annual dividend yield hasn’t been enough to cover the share-price losses in 2022 so far. Shareholders could really use a win today, as NKE stock has tumbled from $164 in early January to just $111 today.

What’s Happening With NKE Stock?

So, what’s the word on the Street? Is there a realistic hope for a recovery despite Nike’s ongoing challenges? At the very least, we can say that the bar has been set low, as analysts expect Nike to post earnings of 82 cents per share, down 11.8% from the year-ago quarter.

Interestingly, at least three experts have issued generally positive ratings on NKE stock even while lowering their price targets. First, Cowen analyst John Kernan cut his price target from $139 to $133 but issued a “buy” rating on Nike. Kernan’s forecast reflects “32x our FY23 EPS and 25x our EV/EBITDA,” along with “EPS of $6.78 through FY26 driven by an +8% revenue CAGR, EBIT margin expansion to a high teens level … and a mid-teens EPS CAGR.”

Meanwhile, Deutsche Bank analyst Gabriella Carbone slashed her price target from $175 to $152, but maintained a “buy” rating on NKE stock. Carbone envisions that Nike’s China revenues will total $1.74 billion, below the $1.8 billion consensus estimate. However, she posits that trends in North America and Europe could offset that shortfall.

In addition, Credit Suisse analyst Michael Binetti maintained an “outperform rating” on Nike shares but reduced his price target from $165 to $130. Despite the price-objective cut, Binetti reportedly observed that consumer demand remains strong and that Nike is pushing to get its inventory out to customers.

It appears, then, that NKE stock might just outperform and be a buy as Nike gets ready for the big earnings event. Even with the price-target cuts, there’s still implied upside from the current share price. Hence, the sentiment isn’t entirely negative. At least the bulls can take some comfort in that.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


Article printed from InvestorPlace Media, https://investorplace.com/2022/06/is-nike-nke-stock-a-buy-ahead-of-earnings-3-analysts-weigh-in/.

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