Through TheFLY's Eyes: Nike

from Theflyonthewall.com

















Nike’s Silver Swoosh Lining

Nike's (NKE) shares dropped more than 4.5% or $3.90 to $79.74 by Wednesay at mid-day after the company reported its first earnings decline in three years.

Nike reported Q4 EPS of $1.39, excluding items, which was in-line with the Reuters consensus estimate of $1.39, but that could not stop the market from taking a bearish view of the report. Many analysts pointed to less-than-stellar, high-end shoe product performance, which undoubtedly contributed to Wednesday’s selling.

However, one investment bank of significance took a decidedly less-negative view of Nike’s report.

Goldman Sachs said there are several silver linings, in the report, including: strong U.S. future orders, up 9%, the prospect of improving revenue trends in Europe and Japan, expectations for improving gross margins in 2H 2007, and other positive factors. Goldman believes these positives will enable Nike to maintain mid-teens earnings growth moving forward, and the firm has a $102 target for the company.