Emerging markets forex headwinds will mount through Nike's (NKE -5.1%) FY15 and investments in women's, direct-to-consumer, and digital offerings will also pressure results, thinks Canaccord, reiterating a Hold following the company's FQ3 beat and soft guidance. The firm now expects FY15 EPS growth of just 12%, below the 16% pre-earnings consensus.
UBS (Buy) thinks a steep valuation (24.7x forward EPS going into earnings) makes for limited upside until futures visibility or EPS growth improves. At the same time, the firm notes there has been almost no change in Nike's organic growth rate.
"Nike's powerful balance sheet is helping it create a virtuous circle of outsized investment spending, operational excellence, brand strength, and ROIC gains," declares Morgan Stanley (Overweight). MS is confident Nike can post a 10%/year shareholder return over three years even if its P/E falls to its long-term average.