Earnings preview: Will Nike prime estimates regardless of weak point in China, macro headwinds?

Nike (NYSE:NKE) is scheduled to announce Q1 outcomes on Thursday, Sept. 29, after market shut.

Consensus EPS estimate is $0.92 and consensus income estimate is $12.29B (+0.3% Y/Y).

During the last 2 years, NKE has crushed EPS estimates 100% of the time and income estimates 75% of the time.

During the last 3 months, EPS estimates have seen 9 downward revisions and income estimates have seen 14 downward revisions.

RBC Capital Markets remained bullish on NKE as it’s anticipated to learn from sturdy development within the Asia Pacific area and the upcoming FIFA World Cup in Qatar.

UBS reiterated its bullish view on NKE after its shareholder assembly earlier this month, saying the primary takeaway was NKE’s sturdy conviction round client direct technique.

KeyBanc Capital Markets added NKE to its record of prime retail picks as shifting its enterprise from wholesale weighted towards direct will profit margins over time.

Alternatively, Barclays downgraded NKE on rising dangers that steadiness out potential rewards subsequent yr, together with waning wholesale demand, lockdowns in China, extra stock, and foreign exchange headwinds.

BNP Paribas downgraded NKE because the agency’s FY25 targets appear bold, given elevated uncertainty in China in addition to potential market share loss and better discounting within the U.S.

This autumn recap:

• NKE shares rose marginally instantly after the agency reported This autumn earnings beat. Nevertheless, gross sales in China fell 19%, led by a 39% drop in attire gross sales amid lockdowns.
• A day later, NKE shares reversed course on issues over slumping gross sales in China and analysts lower their worth targets to issue within the robust macroeconomic backdrop.

SA contributor JR Analysis in a bullish evaluation stated the market de-risked NKE’s valuation additional in anticipation of a recession and traders ought to capitalize on this pessimism.

Shares of NKE, which declined 40% YTD, underperformed the Dow Jones and S&P 500 indexes within the final one yr.