Stock Market News

Nike a top pick at Bernstein but Adidas cut on elevated consensus

2024.01.04 13:01


© Reuters. Nike (NKE) a top pick at Bernstein but Adidas (ADDYY) cut on elevated consensus

In a note Thursday, Bernstein named Nike (NYSE:), Burlington Stores (NYSE:), and TJX Cos. (NYSE:) as its top US apparel and specialty retail picks and downgraded shares of Adidas AG (OTC:) to Neutral from Outperform.

Analysts told investors that 2024 is shaping up to be a year of two halves for US consumer discretionary spending. They see an H1 middle-income squeeze and trade-down to off-price, followed by an H2 rally in sportswear and brands driven by easy comparables and rate cuts.

Nike, which has been given a $134 price target by Bernstein, is the firm’s top pick for the next six months. Analysts said December’s guidance cut creates some opportunity for a short-term beat. In addition, “the market overreacted in slashing FY25 numbers,” they wrote. “We expect to see positive revisions through the next few months as Fall 2024 growth looks better than expected. Meanwhile, the multi-year margin story is still intact, and we model ~20% EPS growth over the next 3 years.”

Burlington, which was given a $218 price target, up from $200 per share, is Bernstein’s top pick for a 12-month timeframe, with “the off-price underdog” underperforming its high-quality peers. Analysts said the company has a huge 27% EPS CAGR ahead. “Even accounting for some execution risk from less-seasoned buyers and mgmt, this earnings growth ramp is not priced in yet, and we expect the multiple to expand as confidence in Mgmt builds through the year,” they wrote.

Meanwhile, TJX, which the firm has assigned a $107 price target, up from $100, is the top pick for a 2+ year timeframe, with the company moving beyond conventional off-price into more categories, higher price points, and higher income customer segments. Analysts said this is driving a multi-year expansion in both comps and margins, with very low execution risk from a high-quality mgmt team. “Our numbers gradually diverge from consensus over the next 3 years, as we think this TAM expansion story is not priced in yet,” they wrote.

Finally, Bernstein downgraded Adidas shares, lowering the price target to €200 from €205. Analysts said that consensus estimates are too high for the first half, and the combination of soft wholesale order books and weak global consumer demand means that H1 guidance is “likely to disappoint.” While the firm likes Adidas over the long term and still sees some upside, it prefers to tactically wait out a short-term correction before getting more constructive.

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 97,443.11 1.50%
ethereum
Ethereum (ETH) $ 3,336.10 2.32%
tether
Tether (USDT) $ 1.00 0.05%
solana
Solana (SOL) $ 246.66 4.85%
bnb
BNB (BNB) $ 650.38 2.95%
xrp
XRP (XRP) $ 1.36 11.89%
dogecoin
Dogecoin (DOGE) $ 0.416524 11.13%
usd-coin
USDC (USDC) $ 1.00 0.02%
cardano
Cardano (ADA) $ 0.989753 8.46%
staked-ether
Lido Staked Ether (STETH) $ 3,338.16 2.14%
tron
TRON (TRX) $ 0.204529 7.02%
avalanche-2
Avalanche (AVAX) $ 39.88 7.02%
stellar
Stellar (XLM) $ 0.534932 22.46%
the-open-network
Toncoin (TON) $ 6.00 3.21%
shiba-inu
Shiba Inu (SHIB) $ 0.000025 9.29%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,965.16 1.95%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 97,309.07 1.17%
polkadot
Polkadot (DOT) $ 8.41 4.63%
chainlink
Chainlink (LINK) $ 16.63 4.30%
bitcoin-cash
Bitcoin Cash (BCH) $ 492.58 7.56%
weth
WETH (WETH) $ 3,335.63 2.23%
sui
Sui (SUI) $ 3.28 7.86%
pepe
Pepe (PEPE) $ 0.00002 9.78%
leo-token
LEO Token (LEO) $ 8.64 0.25%
near
NEAR Protocol (NEAR) $ 6.29 1.52%
litecoin
Litecoin (LTC) $ 94.84 7.89%
aptos
Aptos (APT) $ 11.96 6.53%
uniswap
Uniswap (UNI) $ 10.55 0.64%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,512.80 2.26%
hedera-hashgraph
Hedera (HBAR) $ 0.144057 4.75%
usds
USDS (USDS) $ 0.998666 0.34%
internet-computer
Internet Computer (ICP) $ 10.86 6.71%
crypto-com-chain
Cronos (CRO) $ 0.188099 4.32%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.542468 2.98%
ethereum-classic
Ethereum Classic (ETC) $ 28.12 7.75%
render-token
Render (RENDER) $ 7.53 3.90%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.08%
kaspa
Kaspa (KAS) $ 0.149276 8.58%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.43 4.97%
bittensor
Bittensor (TAO) $ 499.09 5.86%
whitebit
WhiteBIT Coin (WBT) $ 24.46 0.88%
dai
Dai (DAI) $ 1.00 0.08%
arbitrum
Arbitrum (ARB) $ 0.827254 3.16%
bonk
Bonk (BONK) $ 0.000045 12.31%
mantra-dao
MANTRA (OM) $ 3.72 3.26%
cosmos
Cosmos Hub (ATOM) $ 8.60 5.60%
vechain
VeChain (VET) $ 0.040601 6.01%
celestia
Celestia (TIA) $ 7.89 26.25%
filecoin
Filecoin (FIL) $ 5.45 4.71%
okb
OKB (OKB) $ 52.76 3.86%