Barclays sees NKE surging more than 20% after the apparel giant’s latest earnings
It’s time to get into Nike shares, according to Barclays. Analyst Adrienne Yih upgraded shares to overweight from equal weight, and raised her price target, saying the strength of Nike’s latest earnings results show the sports apparel retailer is getting back to its long-term targets — despite some weakness in China. “NKE’s FY3Q23 significant beat on sales of $12.4B (consensus $11.5B) and EPS of $0.79 (consensus of $0.54) is evidence of broad-based brand strength, in spite of a weakening consumer macro backdrop,” Yih said to clients in a Wednesday note. “Sales upside was across both DTC and Wholesale and all geographies led by NA, except China.” NKE YTD mountain Nike shares YTD Nike worked to offload excess inventory and navigate issues in its supply chain like other retailers during the holiday season. Nike shares are 7% higher in 2023 after dropping nearly 30% last year. Now, however, the analyst expects further upside for the sports apparel retailer as it improves its inventory troubles and shows signs of improvement in China. Yih raised her price target by 40% to $154 from $110. That means shares could jump 22% from Tuesday’s close of $125.61. Nike shares were down 0.5% in the Wednesday premarket. “Combining improving freight relief as we enter FY24 with reduced promotional pressure, we believe the visibility on gross margin recapture is significantly improved,” Yih wrote. “Brand strength and a deep pipeline of high heat innovation is driving strong full-price reception to new footwear launches in both the DTC and wholesale channels,” Yih added. —CNBC’s Michael Bloom contributed to this report.