3 Consumer Stocks Hit 52-Week Highs
Each of the stocks received a buy rating from TheStreet Ratings .
Nike is scheduled to report its third-quarter earnings on March 22. Analysts, on average, anticipate earnings of $1.61 a share on revenue of $5.81 billion.
"Sportscan data and retailer commentary (we believe unit growth has continued with no resistance to price increases at retail) indicates that Nike's futures should remain strong, supported by: (1) price increases that began at retail in December that should continue to support NKE's futures thru 1H12, (2) continued strength in lightweight and technical Running led by Free and AirMax, (3) expected uptick in Basketball supported by the return of the NBA season, (4) continued strength in Performance Apparel supported by Nike Pro Combat and the women's Tempo Short, (5) clean Athletic retailer inventory levels, (6) continued Int'l strength led by China, Central/Eastern Europe, and Emerging Markets (with the 2012 London Olympics as a potential catalyst), and (6) new product innovations, including: Nike Fly-Knit, expansion of Lunar technology, and Nike+ (for Bball and Training)," Bank of America Merrill Lynch analysts wrote in a report Monday.
Shares of Nike hit a 52-week high Monday of $112.50. The stock's 52-week low of $69.43 was set on March 22, 2011.
Nike has an estimated price-to-earnings ratio for next year of 19.2 times; the average for footwear companies is 14.29. For comparison, both Steve Madden (SHOO) and Crocs(CROX) have lower forward P/Es of 11.05 and 11.61, respectively.
Sixteen of the 23 analysts who cover Nike rated it buy. Six analysts gave the stock a hold rating and one rated it sell.
TheStreet Ratings gives Nike a A+ grade with a buy rating and $127.89 price target. The stock has risen 16.46% year to date.
The retailer's stock was raised to an outperform rating from BMO Capital Markets analysts.
"We are raising our rating on GPS to OUTPERFORM from MARKET PERFORM," BMO Capital Markets analysts wrote in the report Monday. "Up until now we had been at a MARKET PERFORM on the name because of continual merchandising mistakes, particularly at the core Gap brand, a lack of sustainability in operating performance, and a revolving door of merchants that was unable to effect lasting changes. However, we now think steps toward restoring its brands' credibility are becoming more evident, which gives us greater confidence that management can execute on its turnaround strategy across all three brands in 2012."
In other news Monday, Gap is opening its first franchise, standalone store in South Africa this week, according to Reuters.