If there's a consensus on Nike's stock (NYSE: NKE) after Thursday's earnings release, it's something like this: It's a great stock, but everybody knows that already. So it's overpriced.
Analysts worry about slow sales in China and future orders below previous expectations. The stock also trades at a high price relative to similar stocks, based on earnings.
Here are snippets of comments from a few analyst newsletters since the earnings release:
Christopher Svezia, Susquehanna International Group
That said, (fiscal year 2014) guidance came in below current Street expectations, causing shares to dip 2 percent after market. The top-line outlook remains solid with currency-neutral futures up 8 percent, but expectations for low-double-digit (fiscal year 2014 earnings per share) growth was below the Street at 14.5 percent. While the future clearly remains bright for Nike and there is likely upside to guidance, valuations remain at peak levels and growth expectations have come in. As a result, we see few catalysts for upside near-term and would wait for either a better entry point or clearer signs that numbers will be increasing.
Sam Poser, Sterne Agee
Our Call: Remain on the sideline: Necessary investments are being made for long-term growth. The investments appear to be targeting material incremental profitable growth in time for the Olympics in Brazil in '15 and '16. We expect earnings to grow modestly for the foreseeable future. Lowering (fiscal year 2014 earnings per share) from $3.04 to $2.96 and introducing our (fiscal year 2015 earnings per share) estimate of $3.26.
Faye Landes, Cowen & Co.
We do not think anyone should lose sleep about Nike's top-line prospects, given both the current momentum and the upcoming Winter Olympics and World Cup. Some elements of fiscal year 2014 guidance may give investors pause, though we stress that we would not be overly cautious or cute on the stock here.
Camilo Lyon, Canaccord Genuity
While Nike continues to lead with innovation, we believe a lower entry point awaits.
Omar Saad, ISI Group Luxury
We think Nike’s solid (fourth quarter) and decidedly positive outlook and tone last night should dispel the notion that the shares are over-extended. With ongoing strength in North America, an accelerating rate of gross margin expansion, and tangible signs of progress in China, we think Nike’s shares are poised for another leg up in (fiscal year 2014).
The Portland Business Journal is a KATU News partner.