Nike: stock slumps with UBS downgrade

(CercleFinance.com) - UBS announced on Friday that it had downgraded its recommendation on Nike shares from 'buy' to 'neutral', also slashing its target price from $125 to $78 (cp: $75, -20.
5%).

From the analyst's point of view, the latest quarterly results published by the sporting goods manufacturer highlight fundamentals that are much worse than anticipated.

Our main conclusion is that no quick turnaround can be envisaged in terms of earnings, the broker says.

UBS says that Nike will have to embark on an overhaul of its business that could last several years before returning to more solid sales growth rates.

For the analyst, this trajectory will depend very much on the equipment manufacturer's ability to reinvent itself and offer new products, a scenario that he does not necessarily see materializing.


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