Nike: Strong, despite Running into Supply Chain Headwinds

Nike (NKE) delivered mixed fiscal Q1 results on Thursday. The designer, marketer, and distributor of athletic wear posted revenues of $12.3 billion in Q1, up 16% year-over-year, but missed analysts’ Read More... The post Nike: Strong, despite Running into Supply Chain Headwinds appeared first on TipRanks Financial Blog.

Nike: Strong, despite Running into Supply Chain Headwinds

Nike (NKE) delivered mixed fiscal Q1 results on Thursday. The designer, marketer, and distributor of athletic wear posted revenues of $12.3 billion in Q1, up 16% year-over-year, but missed analysts’ estimates of $12.5 billion.

Diluted earnings came in at $1.16, up 22% year-over-year, and surpassed the Street’s estimate of $1.11 per share.

Considering the strong demand for Nike’s apparel and footwear, the company’s brand strength appears robust, and I remain bullish on the stock. (See NKE stock charts on TipRanks)

The company's outlook seems to be hampered by supply chain headwinds. Management had stated earlier that it was expecting transit times to remain longer for the rest of FY22.

It reiterated the same on its earnings call, and stated that transit times “deteriorated even further in the first quarter, with North America and EMEA seeing increases in transit times due primarily to port congestion and labor shortages.”

Nike’s management also added that many of its factory partners in Vietnam and Indonesia ceased operations in Q1. While the company’s contract factories in Indonesia are now fully operational, in Vietnam NKE’s factories are still closed.

As a result, Nike now anticipates FY22 revenues “to grow mid-single digits versus the prior year, versus our prior guidance of low-double digit growth.”

For Q2, NKE has projected “revenue growth to be flat to down low single digits versus the prior year, as factory closures have impacted production and delivery times for the holiday and spring seasons.”

China is an important market for Nike, and in Q1, the company’s sales in Greater China grew 11% year-over-year to $2 billion.

Cowen & Co. analyst John Kernan suggests that while Western brands are highly desired by people in China, “the trend has become much more volatile due to COVID and geopolitical tensions.”

Furthermore, Kernan believes that “China accounts for over 40% of future sales growth for Nike and Adidas (ADDYY), in our view.” Kernan has a Buy rating on the stock, and a price target of $181 (21.5% upside).

Nike also sources its apparel and footwear from contract factories in China. In FY21, China produced 24% and 19% of the company’s footwear and apparel, respectively.

Turning to the rest of the Street, analysts are bullish about Nike, with a Strong Buy consensus rating, based on 21 Buys, three Holds, and one Sell.

The average NKE price target of $185.13 implies approximately 24.1% upside potential from current levels.

Disclosure: At the time of publication, Shrilekha Pethe did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

The post Nike: Strong, despite Running into Supply Chain Headwinds appeared first on TipRanks Financial Blog.

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electroCore: Could Patent Result in Commercial Success?

electroCore (ECOR) is a commercial-stage bioelectronic medical device company, with a proprietary non-invasive vagus nerve stimulation, or nVNS, therapy. nVNS is a “bioelectronic medical therapy that modulates neurotransmitters and immune Read More... The post electroCore: Could Patent Result in Commercial Success? appeared first on TipRanks Financial Blog.

electroCore: Could Patent Result in Commercial Success?

electroCore (ECOR) is a commercial-stage bioelectronic medical device company, with a proprietary non-invasive vagus nerve stimulation, or nVNS, therapy.

nVNS is a “bioelectronic medical therapy that modulates neurotransmitters and immune function through its effects on both the peripheral and central nervous systems.”

I remain neutral about everCore. (See electroCore stock charts on TipRanks)

The company’s gammaCore therapy is its first U.S. Food and Drug Administration (FDA) approved, non-invasive, hand-held medical therapy applied at the neck to treat migraines and cluster headaches.

everCore generates revenues through its gammaCore Sapphire flagship model; a portable, rechargeable, reusable, and reloadable option that can be self-administered by patients. This is a prescription-only model.

Last week, the company announced that the U.S. Patent and Trademark Office had issued a patent to the company “relating to devices, systems and methods integrated with, or coupled to, smartphones that allow patients to self-treat medical conditions, such as migraine headache, by electrical non-invasive stimulation of nerves.”

The company is looking at building an intellectual property (IP) portfolio centered around smartphone-connected and smartphone-integrated non-invasive therapy.

ECOR expects that this IP could be the foundation for combining the company’s nVNS therapy with application-based digital health platforms.

When it comes to the second quarter, the company earned revenues of $1.3 million, a jump of 69% year-over-year. ECOR’s adjusted EBITDA net loss narrowed to $4.1 million in Q2, versus a loss of $4.3 million in the same period of last year.

The company has focused on its sales efforts through two channels: the U.S. Department of Veterans Affairs and the U.S. Department of Defense, and the United Kingdom.

Dan Goldberger, CEO of electroCore, stated, “We saw continued progress in operating metrics across all our revenue channels. Our cash balance of $23.7 million at June 30, 2021, together with the approximately $18.8 million raised in our subsequent public offering and lower operating burn, puts the company in an excellent position to execute on its plan through 2022.”

When it comes to its Q3, ECOR has projected net revenues of $1.5 million and the usage of cash, net of financing activities, to be around $4.5 million.

Following the Q2 results, JMP Securities analyst David Turkaly reiterated a Hold rating on the stock.

According to Turkaly, the company’s Q2 results represented “modest incremental progress in its commercial and clinical efforts, including sequential growth within its VA/DoD [U.S. Department of Veterans Affairs and U.S. Department of Defense] channel (+15% over 1Q21), and a multitude of new investigator-initiated studies featuring its gammaCore technology.”

However, Turkaly is of the view that while ECOR’s proprietary gammaCore therapy has numerous advantages, “the company has yet to establish a secular growth profile and the physician adoption that is paramount to building a sustainable business.”

This could change with the patent obtained by everCore last week, as the company stated that the possibility of Remote Patient Monitoring or Remote Therapeutic Monitoring with the patent could “enable future business models and revenue streams for the company’s products.”

Turning to the rest of the Street, Wall Street analysts are bullish about electroCore, with a Strong Buy consensus rating, based on three Buys and one Hold.

The average electroCore price target of $3 implies 185.7% upside potential from current levels.

Disclosure: At the time of publication, Shrilekha Pethe did not have a position in any of the securities mentioned in this article​.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

The post electroCore: Could Patent Result in Commercial Success? appeared first on TipRanks Financial Blog.

Source : Tip Ranks More   

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