Nike IncNKE
▼ NegativeCapitalrelevance
UBS warns Nike's Q1 results will bring weak guidance and downward EPS revisions, cutting its price target 13% to $42.
Impact on stocks 2
Consumer Discretionary
Nike IncFinancials
UBS Group AGUBSG
Mentioned
UBS has warned of a negative catalyst ahead for Nike, saying in a note Thursday that the sportswear giant's first-quarter results are likely to bring weak guidance and downward earnings revisions. Analyst Jay Sole forecast a 5-cent miss on first-quarter earnings and an implied second-quarter outlook of 31 to 43 cents, below the Street's 53-cent estimate, and said he expects Nike's stock price to fall due to weak guidance. Sole added that UBS's channel checks suggest Nike's global sales growth has deteriorated over the past three months, with pressure across U.S. and European direct-to-consumer sales, the European wholesale channel and China, alongside elevated promotions. He said the market still underestimates the magnitude of the coming downward EPS revisions, noting short interest recently hit a five-year peak and the shares trade at 21 times forward earnings versus a 34 times five-year average. UBS lowered its price target 13% to $42 but kept a Neutral rating on the shares, and Sole said Nike's stock would likely fall if the company guides to fiscal 2027 earnings below the buyside consensus of around $1.55, with UBS's own estimate at $1.30 and the options market pricing a move of about 8% around the event.
Nike IncUBS warns Nike's Q1 results will bring weak guidance and downward EPS revisions, cutting its price target 13% to $42.
UBS Group AG