Jefferies Reiterates Rating, PT On NKE

Jefferies is reiterating its Buy rating and its $100 price target on Nike NKE as the company prepares to release its numbers from F4Q11. According to Jeffries, “We believe Nike is positioned to capitalize on a strong product cycle still in its early innings. We believe the recent pullback presents an attractive entry point as expectations have come in and strong sales momentum appears in tact… All eyes will be on 4Q gross margins and management's outlook for that line item for FY12. Expectations were brought down unexpectedly last quarter when management guided gross margins to be down over 300bps for the next several quarters, until Spring 2012 when price increases are implemented, costs stabilize and air freight usage moderates. Heading into the quarter, we look for more specific color on Nike's gross margin guidance, which is one of the most conservative in the footwear/ apparel universe.” NKE closed yesterday at $83.23.