Yahoo Finance NIKE, Inc. Just Recorded A 25% EPS Beat: Here's What Analysts Are Forecasting Next
A week ago, NIKE, Inc. (NYSE:NKE) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. The company beat both earnings and revenue forecasts, with revenue of US$11b, some 6.9% above estimates, and statutory earnings per share (EPS) coming in at US$0.78, 25% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for NIKE
After the latest results, the 32 analysts covering NIKE are now predicting revenues of US$43.1b in 2021. If met, this would reflect a solid 13% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 68% to US$3.04. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$43.1b and earnings per share (EPS) of US$3.03 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$160, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values NIKE at US$185 per share, while the most bearish prices it at US$105. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the NIKE's past performance and to peers in the same industry. The analysts are definitely expecting NIKE's growth to accelerate, with the forecast 13% growth ranking favourably alongside historical growth of 4.7% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that NIKE is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for NIKE going out to 2025, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with NIKE , and understanding them should be part of your investment process.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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