Brand momentum is building, raising PT to $79
We see considerable momentum building at Nike. The expected product rollout ramp over the next several months should return sales back to a high-single-digit growth trajectory. A number of gross margin pressures should dissipate, resulting in organic gross margin expansion driven by increasing full-price sell-through and manufacturing innovation. Long-term, we see scope for operating margins to advance into the high-teens, and see mid- to high-teens earnings growth as a good reason to have Nike as a long-term core holding.NIKE is engaged in the design, development and marketing and selling of athletic footwear, apparel, equipment, accessories and services. The company focuses its NIKE Brand product offerings in Running, NIKE Basketball, the Jordan Brand, Football (Soccer), Training and Sportswear categories. The company markets products designed for kids, as well as for other athletic and recreational uses such as American football, baseball, cricket, golf, lacrosse, tennis, walking, and other outdoor activities. The company has license agreements that permit unaffiliated parties to manufacture and sell, using the company-owned trademarks, certain apparel, digital devices and applications and other equipment designed for sports activities.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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