Nike (NKE) is unlikely to post material surprises in Q2 due to a tightly guided quarter and management visibility, RBC Capital Markets said in a Thursday research note. The company is due to report Q2 results on Dec. 18.
For fiscal Q2, the brokerage said it expects diluted EPS of $0.35, group revenue of $12.16 billion, and gross margin of 40.4%.
The company is likely to record "fairly stable" inventories at $7.95 billion in Q2 on quality improvement as it nears the end of its inventory clean-up phase, analysts wrote.
For Q3, RBC expects flat revenue and gross margin growth guidance but estimates earnings growth of 2% above consensus estimates on marginally better operating leverage, RBC stated.
New products show decent signs of momentum. However, website traffic trends remain negative, but are likely to recover in the coming months, according to the note.
The brokerage said it reiterated its outperform rating and price target of $85 per share.
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