Nike: stock hit as BofA cuts TP

(CercleFinance.com) - On Wednesday, Bank of America reiterated its buy recommendation on Nike, while lowering its target price for the stock from $104 to $100 (cp: $83, -6.
8%).

In a reaction note, the analyst says that the sports equipment manufacturer's sales fell by 10% over the past quarter, leading its management team to temper its expectations for the full year, notably due to disappointing direct-to-consumer (DTC) sales, particularly online.

BofA is nonetheless encouraged by plans to boost innovation in both performance and lifestyle products, efforts which are already beginning to bear fruit in running, where sales rose in the last quarter.

The broker is also optimistic about the renewed focus on sales through wholesalers, and especially the strengthening of partnerships with Dick's and Foot Locker.

In its view, this rethinking of the group's fundamentals is a good thing as Elliott Hill prepares to take on the role of CEO, helping to implement a new strategy and limit the risk of sales disappointment.


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