Thursday, March 18, 2010

The Globaliser 18 March 2010 [citibank capital markets] $NKE Financials Downgrade

‘While Nike is likely to be up on its strong Q3 beat and better than expected global futures number’, enthuses US Apparel analyst Kate McShane, ‘we would still be buyers ahead of the investor day on May 5th… which we expect will be the next catalyst: we think it will focus on further growth opportunities for apparel, long term growth targets, and capital allocation… in the meantime, we are raising our estimates, to reflect its Q3 beat and management’s upbeat business outlook… and lifting our target price by $5 to $80… Nike is on Citi’s Top Picks Live! list…
Buy Nike’.

‘It’s not been different this time’, determines Global Strategist Robert Buckland, ‘despite all the talk about the structural impact of the global financial crisis and subsequent deep recession… global equities are up 63% from their lows a year ago… and the magnitude of this rebound is consistent with the magnitude of the preceding bear market… what’s next in our view is likely a grind higher over the next 24 months… in which equity market performance will be reasonable, but not spectacular… so buy the dips and don’t chase the rallies too hard… history also suggests there may be more to go for on the cyclical/defensive trade… but high beta strategies that work well in the surge, will become less appropriate as markets grind higher… as such, we are cutting this cycle’s ‘problem child’ – the ultra high beta trade that leads global equities down in the bear market and back up in the recovery - Financials, back to Neutral from Overweight’.

The Globaliser - 18 March 2010

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