Nike to trade lower following Foot Locker’s dismal results, Citi says – SNT Oline
Citigroup analysts are watching Nike stock for downside risk after disappointing quarterly results from retailer Foot Locker . The firm Monday reiterated a neutral rating on Nike stock, with a price target of $125 per share. That still represents about 9% upside compared with Friday’s $114.76 per share close. Nike stock is down nearly 2% from the start of the year and shares fell another 1.5% in premarket trading Monday. NKE YTD mountain Nike stock. Citi analyst Paul Lejuez said concerns over inventory in footwear retailers on lower consumer spending could push Nike to issue gross margin guidance below Wall Street expectations. “While NKE has easy GM comparisons (following an estimated decline of 250bps in F23), we believe there is risk they will guide to GM expansion below consensus, which would be a negative for the stock when they report at the end of June (though we believe these concerns may pressure the stock near term as well),” Lejuez said. Citi forecast gross margins to increase 280 basis points for the full year in 2023, matching Wall Street expectations. Citi also downgraded Foot Locker to neutral Monday, citing the “economic sensitivity of [Foot Locker’s] customer base” underpinned by the company’s weak results Friday . The firm lowered its price target on Foot Locker stock to $30 per share from $48. That implies little change in the stock from its current price. The stock fell 2.4% in premarket trading. FL YTD mountain Foot Locker stock. — CNBC’s Michael Bloom contributed to this report.
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