NIKE's (NKE) fiscal Q2 results are likely to show a deterioration of global sales growth trends, potentially resulting in the company issuing weak guidance for fiscal Q3, UBS said in an earnings preview emailed Monday.
Nike's fiscal Q2 results are expected to show how the company's fundamental trends are "getting worse," UBS said, adding that its research and industry data indicated that Nike's US direct-to-consumer sales growth rate was "weak" while its European business "underperformed" and its China sales growth trend "disappointed" during the quarter.
The company is also likely to issue a fiscal Q3 earnings guidance of $0.47 to $0.57 per share, below the expected market's benchmark of $0.55 to $0.65 per share, according to the note.
UBS said it agrees with the options market's view of a 7.7% change in the stock's price in either direction following the earnings release versus a 6% historical average move.
Nike plans to release its fiscal Q2 financial results on Dec. 19.
UBS reiterated its neutral rating on the stock and slashed its price target by $2 to $80.
Price: 78.09, Change: -0.81, Percent Change: -1.02
