Nike Q3 Earnings Preview: Why Analysts Are 'Incrementally Cautious Short-Term'

Nike Inc NKE will report third-quarter financial results after the market close Thursday.

Here's a look at the earning estimates, what analysts are saying and key items for Nike investors to watch.

Nike Earnings Estimates: Analysts expect Nike to report third-quarter revenue of $12.288 billion, according to estimates from Benzinga Pro.

The company reported revenue of $12.39 billion in last year's third quarter. The estimated revenue would mark the lowest quarterly total from the apparel company since the fourth quarter of 2022. Nike has beaten revenue estimates from analysts in seven of the last 10 quarters, but missed in the last two straight quarters.

Analysts expect Nike to report third-quarter earnings per share of 74 cents compared to 79 cents in last year's third quarter. Nike has beaten earnings per share estimates in nine of the last 10 quarters.

Related Link: Tiger Woods, Nike Breakup: How The Stock Performed Over Their 30-Year Affiliation

What Nike Analysts Are Saying: Nike’s competition has analysts concerned for the short-term and long-term outlook.

"While we remain long-term optimistic on NKE due to their long-track record of success, we've become incrementally cautious short-term due to a frustrating lack of product innovation," Wedbush analyst Tom Nikic said in a note.

The analyst has an Outperform rating and lowered the price target from $131 to $115.

Nikic said Nike's "Consumer Direct Acceleration" could have been a mistake.

"They focused too much on WHERE they were selling and lost focus of WHAT they were selling."

The analyst said competitors have bene able to come in and "chip away" at Nike's dominance. This includes the Nike-dominated basketball segment, he said, where it has seen more competitors gaining momentum.

Nikic expressed optimism around some new products coming from Nike that he said could turn sentiment around.

"Investor sentiment is quite low now, and Nike has a long track record of proving doubters wrong."

Top-line growth is needed from Nike for shares to take off, Truist analyst Joseph Civello said in a new investor note.

"We continue to believe that the stock will remain rangebound until there is a clearer line of sight into stronger/consistent top line growth," Civello said.

The analyst has a Hold rating on Nike with a $111 price target.

Competition is a concern for Civello, with On Holding ONON, Lululemon Athletica LULU and Deckers Outdoor Corporation DECK named as companies that could be taking market share from Nike.

Here's a look at other recent analyst ratings for Nike:

Bank of America: Neutral, lowered price target from $125 to $120.

Telsey: Outperform, lowered price target from $140 to $120.

Citigroup: Buy, lowered price target from $135 to $125.

RBC Capital: Outperform, lowered price target from $120 to $110.

Morgan Stanley: Overweight rating, lowered price target from $125 to $124.

Key Items To Watch: New products will be a key topic for analysts and investors when it comes to Nike's report and guidance. The company previously said that 2024 would see several new products that it believed would help push growth.

Another topic could be sports and endorsements. The company lost Tiger Woods as a sponsored athlete. Investors may be excited to hear what's in the company's pipeline of products and marketing pushes in light of the upcoming Summer Olympics and Euro 2024 and Copa America 2024 soccer tournaments.

NKE Price Action: Nike shares trade at $100.15 versus a 52-week trading range of $88.66 to $128.63. Shares of Nike are down 18% over the last year.

Read Next: Nike Axes Headcount To Save Cost, Cuts Over 1,600 Jobs: Report

Photo via Shutterstock.