Jefferies analysts recommend buying Nike shares
2022.12.22 14:22
Jefferies analysts recommend buying Nike shares
Budrigannews.com – On Thursday, analysts at Jefferies issued a note with bearish commentary on Lululemon Athletica (NASDAQ:), stating that the “fundamentals have peaked” of the company.
The stock was given an Underperform rating and a price target of $200 per share by the analysts.
“When you can own NKE, why own LULU?” The analysts raised concerns.
“We think markdowns are likely to weigh on results going forward with inventory up 85% YoY in 3Q. To this end, the average discount was 14% in November, up 470bps YoY (in line with October). Our latest web scrape data via Vertical Knowledge shows that LULU’s depth of discounting remains elevated YoY.”
In the meantime, the percentage of items on sale increased sequentially in November, but the overall percentage is still significantly higher than last year (41 percent versus 31 percent).” They penned.
Nike (NYSE:) was described by the analysts. as the “clear winner in a duopoly in the more attractive athletic footwear space” and a “best-in-class brand.”
“NKE posted strong 2Q numbers (see our recap note), with total growth up 27% on a currency-neutral basis, demonstrating best-in-class performance for a brand that generates approximately $70 billion annually in adjusted retail sales.
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We believe that NKE is the clear leader in a duopoly with Adidas in the more appealing athletic footwear market. Meanwhile, “the brand heat can shift at any time,” the analysts elaborated, “LULU operates in the increasingly competitive space of athletic apparel.”
Consequently, they informed investors that Jefferies recommends selling LULU and purchasing NKE.
