© Reuters. Nike’s (NKE) inventory value might double, claims UBS
UBS believes Nike’s (NYSE:) inventory value “might double” if the corporate performs in line with its long-term gross sales and margin targets.
Analysts at UBS, who’ve a Purchase ranking and $150 value goal on the inventory, stated that following a administration assembly, their takeaway is that the sportswear large’s “long-term gross sales and margin targets are nonetheless very achievable.”
“If Nike had been to achieve these targets by FY26, EPS might attain at the very least $6.50. That is greater than 2x the $3.23 Nike earned in FY23. If the inventory holds its P/E, then the inventory might double,” wrote the analysts.
“Whereas this state of affairs is nearer to our “bull case” vs. our base case view which includes a international macro slowdown, it nonetheless has an affordable chance of taking part in out. This can be a predominant motive we charge Nike Purchase and suppose it affords a really engaging threat/reward, even at its present 29x P/E,” they added.
UBS has a excessive conviction, primarily based on its conversations with buyers, that the inventory shouldn’t be pricing in near $6.50 in FY26 EPS.
The funding financial institution anticipates that as quickly because the market begins to sense 2nd by-product gross sales progress charge and margin enchancment, the inventory will begin transferring larger. “This might occur when Nike stories Q1 earnings in late September and even sooner,” revealed the analysts.
