UBS has reiterated its Neutral rating on Nike stock, maintaining a $73.00 price target, amid concerns over near-term earnings risks linked to inventory management and product line issues. Analysts at UBS cited two key reasons for caution: the potential underestimation of the time and cost required for Nike to normalize its inventory levels and the slower-than-expected replenishment of the company’s new product lines.
The analysts noted that Nike may be entering the early stages of an 18-24 month new product innovation cycle, a critical period for the company’s development and product launches, which could impact its performance. However, despite these challenges, UBS remains neutral on Nike, largely due to the strong brand equity of Nike and Jordan.
UBS’s stance is supported by data from the 10th Global Sportswear Survey by UBS Evidence Lab, which shows that Nike and Jordan brands continue to maintain a strong image among consumers. This brand strength is seen as a key asset that could help Nike navigate its current difficulties and drive future recovery.
UBS analysts believe that the enduring appeal of Nike and Jordan brands positions the company well to overcome its short-term obstacles and rebound in the long term. The $73.00 price target reflects UBS’s assessment of the stock’s value, factoring in both current challenges and the company’s brand strength.
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