RBC Capital analysts provided their outlook on NIKE, Inc. (NYSE:NKE) ahead of the upcoming Q3 earnings announcement, scheduled on March 21.
According to the analysts, sentiment on Nike has turned considerably less negative in recent months, supported by China reopening, progress on excess inventory clearance, and the macro environment holding up better than feared.
The analysts remain positive, flagging strong brand heat, and healthy revenue momentum in the near term, and also see the potential for stronger and faster than market-expected margin recovery in 2024/2025.
The analysts estimate $11.54 billion in revenues, 43.8% gross margin (down 280bps year-over-year), and diluted EPS of $0.54. The analysts see potential upside risk to North America (up 16%) and EMEA (up 11%) revenue growth supported by markdown activity, and potential downside risk to Greater China (up 4%) due to COVID disruption which the market will likely 'look-through'.
The analysts raised their price target on the stock to $145 from $130, while maintaining their Outperform rating.