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07/20/17 11:00:00 AM
WORD ON THE STREET

NIKE, Inc., U.S. Bancorp, Sarepta Therapeutics, Inc.

NIKE, Inc.(NKE) : (BZ Newswire) -- Nike Inc (NYSE: NKE) shares have lagged the market in the past year, but have caught fire of late. The stock is up 13.7 percent in the past month, and Morgan Stanley analyst Jay Sole recently said the athletic apparel giant has put its problems in the past. Morgan Stanley has upgraded the stock from Equal Weight to Overweight and raised its price target for Nike to $68. In a new research note, Sole spelled out his bullish case for Nike and said the company is currently at the bottom of a cycle that will be back in the upswing in the near future. Slumping sales have been one of the major factors weighing down Nike's stock over the past year, but Sole said North American sales growth rates should reaccelerate to 5 percent by the middle of fiscal 2018 driven by new products such as Air VaporMax. In fact, Morgan Stanley projects that VaporMax could become Nike's next $1 billion product. Despite the recent hiccups, Sole said Nike's long-term future and growth prospects are bright. "The market does not appreciate Nike's ability to return to solid +L-MSD North America sales growth or drive long-term EBIT margin expansion," Sole wrote. Related Link: The Footwear Industry Has A Hispanic Problem Morgan Stanley is predicting $4.00 in EPS from Nike in fiscal 2021, more than 60 percent above consensus analyst forecasts. While value investors may be concerned about Nike's high multiple, Sole pointed out that the stock currently trades at just a 27 percent valuation premium to the overall S&P 500, well below its historic valuation premium of 49 percent. Copyright Benzinga (BZ Newswire, http://www.benzinga.com/licensing). Benzinga does not provide investmentadvice. All rights reserved.Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga Pro (http://pro.benzinga.com).



U.S. Bancorp(USB) : (BZ Newswire) -- Argus upgraded shares of U.S. Bancorp (NYSE: USB), as it continues to deliver best-in-class returns on equity and assets, strong efficiency metrics, solid mid-single-digit loan growth and earnings consistency. Meanwhile, reviewing the second-quarter results, Barclays said the company needs improved second half to achieve positive operating leverage goal. Argus noted that the shares of USB has gained about 25 percent in the past year compared to the 14-percent gain for the broader market. Q2 Print Analyst Stephen Biggar of Argus noted that the company reported second-quarter earnings per share that were ahead of estimates, with average loans rising 3.7 percent and net interest margin widening, reaching a high point over the past five quarters. Barclays'Jason Goldberg indicated that a penny earnings beat was masterminded by a lower-than-expected tax rate, with most other metrics coming in line with forecasts. Among the businesses, Argus noted that commercial lending has been healthy despite intense competition. The firm sees moderation in lending growth in 2017, with overall loan growth of 4 percent in 2017 and 5 percent in 2018. However, the firm expects net interest margin to expand due to Federal Reserve's interest rate normalization. Although the firm expects one more interest rate hike in late 2017, it is of the view margins would improve in 2018 due to the three rate hikes affected since December 2016. Related Link: Finding A Way: Banks Beat Expectations Despite Struggles As Earnings Go Into High Gear Operating Leverage Not Guaranteed In 2017 Notwithstanding peer-leading operating metrics, Barclays cautioned that they were at the low-end of its targets and operating leverage remained negative. Reflecting increased personnel and tech costs related to regulatory compliance, the firm indicated that the first-half efficiency ratio is at the high end of its historical range. As USB nears the end of the build-out of these programs, Barclays expects the company to be relieved of some expense pressure. The firm thinks higher rates and better loan growth would help improve operating leverage, although it said operating leverage is not a given for the full year 2017. Barclays raised its 2017 earnings per share estimate by $0.05 to $3.45, citing the earnings beat and expectations for better-controlled expenses in the second half. The firm maintains its 2018 earnings per share estimate at $3.80. Argus believes the company deserves to trade at a premium valuation on price/book and price/earnings, given its above-peer-average return on equity, return on assets and efficiency metrics and earnings consistency. Argus Upgrades As such, Argus upgraded shares of USB from Hold to Buy, with a price target of $57. "Our upgrade reflects greater confidence in the margin expansion story from higher interest rates and expectations for continued good loan growth in the company's service territory," the firm reasoned. Barclays has an Overweight rating and $60 price target for the shares of USB. _________ Image Credit: By Bobak Ha'Eri - Own work, CC BY 3.0, via Wikimedia Commons Copyright Benzinga (BZ Newswire, http://www.benzinga.com/licensing). Benzinga does not provide investmentadvice. All rights reserved.Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga Pro (http://pro.benzinga.com).



Sarepta Therapeutics, Inc.(SRPT) : (BZ Newswire) -- Sarepta Therapeutics Inc (NASDAQ: SRPT) shares jumped up over 17 percent during Wednesday's after-hours trading sessions, after the medical research and drug development company crushed earnings estimates. A Closer Look At Q2 Earnings Revenue: $35 million (consensus estimate was $22.3 million) Adjusted Losses: $0.46 per share (was $1.19 per share last year) Guidance: Raised to $125 million-$130 million (was $95 million) After Nomura managing director Christopher Marai spoke to new CEO Doug Ingram following the earnings call, he also highlighted a positive view on Sarepta's future similar to Ingram's March 1 invitation theses. Marai maintains his Buy rating and set an $84 price target. According to TipRanks, eight analysts are averaginga strong buy rating and a price target of $66 on Sarepta. Shares of Sarepta were trading at $40.20 during Thursday's pre-market session, and at time of publication, shares were up 21.01 percent at $41.24. To read the latest and exclusive financial news, visit the Benzinga Pro news wire. Copyright Benzinga (BZ Newswire, http://www.benzinga.com/licensing). Benzinga does not provide investmentadvice. All rights reserved.Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga Pro (http://pro.benzinga.com).



 

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