Nike comments 'reignite' buy thesis: 6 big analyst picks
Investing.com — Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: Outperform initiations at Nike and Lululemon Athletica, and upgrades at HP, monday.com, Hess, and DigitalOcean.
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Evercore ISI initiated coverage on Nike (NYSE:NKE) with an Outperform rating and a price target of $124.00.
The analysts suggest that despite strong ongoing demand for Nike products, the bigger near-term opportunity to boost earnings per share lies in the ongoing recapture of ~350bp of post-COVID transitory costs.
Over the long term, the analysts are quite optimistic based on the remarks made in Q1, indicating that Nike is actively implementing strategies to substantially improve its supply chain, warehousing, and fulfillment costs. The analysts believe these initiatives bolster the thesis that Nike is on a trajectory to increase its EBIT margins to the high teens in the forthcoming years.
The analysts further believe that this outlook holds even in the scenario where direct-to-consumer sales do not meet the 60% revenue threshold, an input that was previously considered essential for achieving such elevated EBIT margin levels.
Shares were recently down marginally to $106.95 in the premarket.
Edward Jones upgraded HP (NYSE:HPQ) to Buy from Hold, as reported in real time on InvestingPro.
The analysts find HP shares to be priced attractively at the moment and anticipate that the PC market will return to growth in 2024 as PCs bought during the pandemic begin to be replaced. Additionally, they believe, with the Microsoft (NASDAQ:MSFT) Windows 10 operating system set to lose support after October 2025, both consumers and
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