NKE stock ripped 6% higher in opening trading on December 21, 2021, after the company reported earnings and revenue beats.
NIKE, Inc. Reports Fiscal 2022 Second Quarter Results
On December 20, 2021, NIKE, Inc. (NYSE:NKE) reported fiscal 2022 financial results for its second quarter ended November 30, 2021. Nike reported Q2 EPS of 83c versus the consensus estimate of 63c. The company reported Q2 revenue of $11.4B versus the consensus estimate of $11.25B.
In Q2, NIKE Brand Digital sales increased 12%, or 11% on a currency-neutral basis, led by 40% growth in North America. Q2 gross margin increased 280 basis points to 45.9%.
The company stated: “Q2 revenues were flat on a currency-neutral basis as we continue to manage the ongoing impact of supply chain challenges across the marketplace. Revenues in Greater China and APLA declined, largely due to lower levels of available inventory resulting from COVID-19 related factory closures. While closures had an impact across our portfolio, North America and EMEA delivered growth due to higher levels of in-transit inventory entering the second quarter.”
“NIKE’s strong results this quarter provide further proof that our strategy is working, as we execute through a dynamic environment,” said John Donahoe, CEO. “We are now in a much stronger competitive position today than we were 18 months ago. And I want to thank our roughly 75,000 global teammates for all their work to provide consumers with the compelling new product, innovation, and experiences that only NIKE can deliver.”
Nike sees Q3 revenue up low-single digits, consensus $10.62B
Nike said they had an incredible Black Friday week with factory reopenings in Vietnam going according to to plan. Nike is increasingly confident supply will normalize heading into 2023 and that digital grew 11% in Q2. The company expects FY22 to be a year of recovery and expects sequential improvement starting in Q3.
Nike results illustrate brand ‘stronger than ever,’ says Jefferies
Jefferies analyst Randal Konik contends that Nike’s Q2 results illustrate that its “brand is stronger than ever,” that the direct-to-consumers shift “continues to shine through,” and that management is “navigating well enough” through disruptions caused by COVID-19. While supply chain issues will continue to dampen margins and sales relative to true demand, Nike is executing well and he sees room for the stock’s multiple to expand to drive shares to his $200 price target, said Konik, who keeps a Buy rating on Nike.
Nike price target raised to $192 from $185 at UBS
UBS analyst Jay Sole raised the firm’s price target on Nike to $192 from $185 and keeps a Buy rating on the shares. The company’s Q2 results were “solid” and Nike’s investments in product innovation, supply chain speed, and digital are unlocking what is likely a multi-year period of above average growth, the analyst tells investors in a research note. Sole adds that he models a 4-year EPS CAGR of 17% which, along with its “enduring global brand relevance”, warrants a 34-times earnings multiple.
Nike price target raised to $192 from $189 at Cowen
Cowen analyst John Kernan raised the firm’s price target on Nike to $192 from $189 and keeps an Outperform rating on the shares. The analyst raised his target following Q2 results which beat his estimates which were the high on the Street.
Nike price target lowered to $185 from $192 at JPMorgan
JPMorgan analyst Matthew Boss lowered the firm’s price target on Nike to $185 from $192 and keeps an Overweight rating on the shares following last night’s fiscal Q2 results. The company is taking market share in an expanding total addressable market, Boss tells investors in a research note. Further, the global outlook for sportswear “remains robust,” projected to grow 7% from 2021 to 2026, supported by structural tailwinds that have been accelerated by the pandemic, says the analyst.
Nike price target lowered to $202 from $206 at Morgan Stanley
Morgan Stanley analyst Kimberly Greenberger lowered the firm’s price target on Nike to $202 from $206 and keeps an Overweight rating on the shares after the company beat guidance and Street estimates with its fiscal Q2 results despite ongoing supply chain disruption. Nike’s guidance likely gives investors confidence in the near-term path back to its long-term targets, said Greenberger, who thinks disruption will linger through FY22 although the long-term opportunity remains unchanged.
Nike price target raised to $185 from $170 at Wedbush
Wedbush analyst Tom Nikic raised the firm’s price target on Nike to $185 from $170 and keeps an Outperform rating on the shares following quarterly results. The analyst notes that three months after Nike sounded the alarm on supply chain disruption, the company provided an “encouraging” supply chain update and reported a better-than-expected Q3.
📺 VIDEO Nike earnings show North America strength, China weakness
Simeon Siegel of BMO Capital Markets, joined CNBC on December 20, 2021, to parse Nike’s earnings, which beat, as well as the companies outlook for the next quarter.
📈 Nike Stock Technical Analysis
The long-term trend is neutral, but the short-term trend is negative. NKE is part of the Textiles, Apparel & Luxury Goods industry. There are 46 other stocks in this industry, NKE did better than 69% of them. NKE is currently trading in the middle of its 52-week range. The S&P500 Index however is trading in the upper part of its 52-week range, so NKE is lagging the market slightly.
There is support at 153.73 from a trend line in the weekly time frame. There is also a support zone ranging from 145.22 to 147.05. This zone is formed by a combination of multiple trend lines in multiple time frames.
There are 4 important resistance areas. Resistance at 158.31 from a trend line in the daily time frame. There is a resistance zone ranging from 164.25 to 168.62. This zone is formed by a combination of multiple trend lines and important moving averages in multiple time frames. There is also resistance at 173.85 from a horizontal line in the daily time frame. Finally, there is a major resistance zone ranging from 177.52 to 177.52. This zone is formed by a combination of multiple trend lines in multiple time frames. The technical rating of NKE is bad and it also does not present a quality setup at the moment. Prices have been extended to the downside lately. For a nice entry it is better to wait for a consolidation. Click here to sign up for email alerts on when NKE stock is a good entry.