Goldman Sachs sees earnings growth ahead for Nike

Goldman Sachs says Nike growth likely

PORTLAND, Ore. — Goldman Sachs & Co. on Thursday issued a “Buy” rating on Nike, saying it expects the company will soon deliver stronger earnings per share growth.

The clothing and athletic shoe company, based in Beaverton, Ore., has beat analysts’ expectations in recent quarters, largely on internal cost-cuts. But sales and gross margins have declined, and earnings have not grown on a per share basis, analyst Michelle Tan wrote in a research note. That should change, she said, with the approach of the World Cup and a recent uptick in U.S. sales.

As earnings grow, Nike shares — which have been trading below their average — will rise. She also noted that a share repurchase could be likely, given the company’s cash position.

Goldman Sachs has a $78 price target on Nike shares. Nike reports quarterly results March 17.

Nike shares rose $1.23 to close at $66.16.