Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
💎 Reveal Undervalued Stocks Hiding in Any Market Get Started
Redburn not as optimistic as the market on Nike and Lululemon ; starts at Sell
© Reuters. Redburn not as optimistic as the market on Nike (NKE) and Lululemon (LULU); Starts at Sell
By Senad Karaahmetovic
Redburn analysts initiated research coverage of the Sportswear sector. The analysts write that there is a “significant dissonance on display with regards to sportswear” and that the outlook is not as bright as valuations of certain stocks show.
Along these lines, they start Nike (NYSE:NKE) and Lululemon (NASDAQ:LULU) at Sell. The former is described as an “outstanding brand with a rich valuation priced for perfection.”
Moreover, Redburn’s deep-dive analysis into Nike indicates that sales and especially margins will disappoint. Analysts' ‘fair value’ of $100 per share suggests a 15% downside risk relative to yesterday’s closing price.
“While we expect decent EPS growth beyond 2023E, we think consensus is too high for multiple outer years and that downgrades will challenge what is a record valuation (risk-free rate adjusted). Moreover, this valuation is high, absolute and relative, despite uncertainties over the recovery in China (and what multiple it should attract),” they added.
Similarly, Lululemon is a new Sell at Redburn as “the next phase will challenge its ability to sustain margins as consensus expects.”
On the contrary, Under Armour (NYSE:UAA), as well as Adidas (ETR:ADSGN), Puma (ETR:PUMG), and JD Sports (LON:JD), are a new Buy at Redburn.
“Shares are near all-time relative lows, and behind the detail we see progress in Footwear, International ex-Asia and wider execution. This is a platform for the new CEO. While there is risk in the short term, there is potentially meaningful upside to consensus in outer years,” analysts wrote on UAA.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.