06:34 NKE Nike discussed favorably in Barron's (85.96 )
Barron's highlights Nike, saying that no firm arouses more sneaker lust than Nike. The co has captured 33% of the $19bn global athletic-shoe mkt, well ahead of Adidas and Reebok (RBK). With $100+ Air Jordans flying off the shelves, the co should keep taking mkt share, a prospect not lost on Wall St. Nike should continue to lap the mkt over the next year or so, as it goes where it has never gone before, selling its lesser brands, but not Nikes themselves, at mass discount chains. Nike recently enlisted Green Bay Packer quarterback Brett Favre to peddle $37 Starter sneakers at Wal-Mart (WMT). Nike is betting gains at its Starter, Converse, Hurley and Cole Haan brands, as well as increasing penetration of hot Asian mkts, will fuel annual long-term profit growth of 15%. With its flagship Nike brand, plus Converse, Starter etc., the co is getting better at covering both the high and low ends of the sneaker mkt. "We believe Nike's valuation multiple should re-expand over time as the co continues to diversify into faster-growing businesses and increases its ROIC" says analyst Robert Ohmes, of BofA. Based on 20x his '07 est of $5.50 and discounted cash flow, Ohmes sees Nike hitting $110. |
