Nike (NYSE:NKE) is set to report its fiscal Q3 2024 earnings on March 21 and Citi analysts believe that any potential weakness in the stock after the print could be a buying opportunity for investors.
The investment giant highlighted a number of challenges that Nike currently faces, noting a significant downturn in sentiment regarding the company's revenue prospects since the Q2 earnings report.
Key concerns include an oversupply in the North American market, despite improvements in inventory management, and persistently high promotional activities, alongside retailers' cautious approach to placing orders.
Moreover, the economic environment in China and Europe remains uncertain and turbulent.
Survey findings also suggest that the company’s arch-rival Adidas is regaining global market share, adding to the competitive pressures on NKE.
“Given these headwinds and lack of clear scaled innovation, we reduced our F25 sales ests (+3.5% vs cons +7%) and anticipate mgmt could guide to +LSD F25 topline growth on this call,” analysts wrote.
“We view a topline reset as a likely “deck clearing” event that could drive near-term weakness, though we believe any weakness should be viewed as a buying opportunity,” they added.
Citi reduced the target price ahead of the Q3 print from $135 to $125.