US Commerce Department data shows that consumer spending increased in July, posting a 0.6% increase, double the 0.3% gain recorded in June. The increase gives added momentum to consumer spending, the engine of US economic activity.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Confident consumers and robust spending are good for stocks across a wide spectrum of sectors, and in recent days Nike (NKE), Nvidia (NVDA), and Chipotle (CMG) have all attracted positive scrutiny from top analysts. The reasons vary from a knock-out quarter to a strong growth prospect to a reinvigorated brand, but the result is the same: boosted price targets and increased investor interest. We’ve opened up the TipRanks database to find out what has actually been said these stocks, and the numbers show.” data-reactid=”12″>Confident consumers and robust spending are good for stocks across a wide spectrum of sectors, and in recent days Nike (NKE), Nvidia (NVDA), and Chipotle (CMG) have all attracted positive scrutiny from top analysts. The reasons vary from a knock-out quarter to a strong growth prospect to a reinvigorated brand, but the result is the same: boosted price targets and increased investor interest. We’ve opened up the TipRanks database to find out what has actually been said these stocks, and the numbers show.
<h4 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Nike, Inc.” data-reactid=”13″>Nike, Inc.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="After missing expectation in its June quarterly release, Nike (NKE – Get Report) was under a microscope. While FY2019 earnings rose 7.5% year-over-year, and Q4 revenue was up 4%, EPS in the June report was down 10%. Currency headwinds, higher costs, and increased overhead were cited as reasons for the slump.” data-reactid=”14″>After missing expectation in its June quarterly release, Nike (NKE – Get Report) was under a microscope. While FY2019 earnings rose 7.5% year-over-year, and Q4 revenue was up 4%, EPS in the June report was down 10%. Currency headwinds, higher costs, and increased overhead were cited as reasons for the slump.
Nike needed a strong quarter to maintain optimism going into fiscal year 2020, and that’s exactly what the company has just reported. The Q1 report showed 86 cents EPS against a forecast of 70 cents, a 22% beat. The revenue beat was smaller, at 2%, but the $10.66 billion in reported revenue was an impressive number on its own. Strong sales supported the EPS and revenue numbers. North American sales were up 4%, while Nike’s Greater China region showed an impressive 27% sales increase.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The earnings report prompted a quick reaction from the analysts. Writing from Evercore ISI, 4-star analyst Omar Saad said the company’s Q1 was “stellar.” He elaborated, “We believe that the world’s single largest apparel and footwear brand can also still be one of the best growth stories in all of consumer. What impressed us most about Nike’s Q1 results were the continued acceleration in online growth and the even stronger growth of the Nike app within digital.” Saad boosted his price target on NKE by 25%, to $150, suggesting an upside potential of 65%.” data-reactid=”16″>The earnings report prompted a quick reaction from the analysts. Writing from Evercore ISI, 4-star analyst Omar Saad said the company’s Q1 was “stellar.” He elaborated, “We believe that the world’s single largest apparel and footwear brand can also still be one of the best growth stories in all of consumer. What impressed us most about Nike’s Q1 results were the continued acceleration in online growth and the even stronger growth of the Nike app within digital.” Saad boosted his price target on NKE by 25%, to $150, suggesting an upside potential of 65%.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Saad was not the only analyst impressed by Nike’s Q1 report. The company received no less than 12 reiterated buy ratings after the release. At Morgan Stanley, 5-star analyst Kimberly Greenberger set a $108 target on the stock, saying, “The first quarter was set to be Nike’s most challenging in fiscal 2020, yet the company beat across every line item and exhibited broad-based strength across geographies and categories… A piece of 1Q’s beat was timing shift & tax, majority flows through benefitting FY2020… momentum suggests further upside.” Her target indicates confidence in an 18% upside.” data-reactid=”17″>Saad was not the only analyst impressed by Nike’s Q1 report. The company received no less than 12 reiterated buy ratings after the release. At Morgan Stanley, 5-star analyst Kimberly Greenberger set a $108 target on the stock, saying, “The first quarter was set to be Nike’s most challenging in fiscal 2020, yet the company beat across every line item and exhibited broad-based strength across geographies and categories… A piece of 1Q’s beat was timing shift & tax, majority flows through benefitting FY2020… momentum suggests further upside.” Her target indicates confidence in an 18% upside.
Overall, Nike holds a Moderate Buy from the analyst consensus, based on 17 buys, 9 holds, and 1 sell given in the past three months. The rash of buy ratings after the fiscal Q1 report indicates a shift a in analyst opinion on the stock. NKE shares sell for $90, with an average price target of $100 suggesting a potential 10% upside for the stock.
<h4 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="NVIDIA Corporation” data-reactid=”27″>NVIDIA Corporation
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="We’ve written in this space before about the travails of the semiconductor chip industry, and Nvidia’s (NVDA – Get Report) position in it. The chip maker is heavily reliant on the gaming sector, and its Q2 report showed $1.31 billion in revenue drawn from gaming-related sales. The solid gaming sales show a firm market for the company’s GPU chips, and explain NVDA’s modest recovery from steep losses in 2H18. The stock has beaten earnings expectations in each of its last three quarterly reports.” data-reactid=”28″>We’ve written in this space before about the travails of the semiconductor chip industry, and Nvidia’s (NVDA – Get Report) position in it. The chip maker is heavily reliant on the gaming sector, and its Q2 report showed $1.31 billion in revenue drawn from gaming-related sales. The solid gaming sales show a firm market for the company’s GPU chips, and explain NVDA’s modest recovery from steep losses in 2H18. The stock has beaten earnings expectations in each of its last three quarterly reports.
A succession of earnings beats, a solid business niche, and good prospects going forward all make Nvidia’s stock attractive. NVDA is currently down 38% from its October 2018 peak, but is up 12% in the last three months. Indications are, Nvidia is turning around and now by the moment to buy the dip.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Toshiya Hari, of Goldman Sachs, has just delivered a notable boost to NVDA, increasing his price target by 7% to $192. He wrote, “We expect the company to deliver strong sequential growth in FY3Q (Oct) in the Gaming segment supported by the normalization in channel inventory and the launch of its new products.” Looking ahead, he added that the firm expects to see the company’s revenue grow 27% year-over-year in the next quarterly report. Hari’s new price target suggests an upside of 7.8% to NVDA.” data-reactid=”34″>Toshiya Hari, of Goldman Sachs, has just delivered a notable boost to NVDA, increasing his price target by 7% to $192. He wrote, “We expect the company to deliver strong sequential growth in FY3Q (Oct) in the Gaming segment supported by the normalization in channel inventory and the launch of its new products.” Looking ahead, he added that the firm expects to see the company’s revenue grow 27% year-over-year in the next quarterly report. Hari’s new price target suggests an upside of 7.8% to NVDA.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Also bullish on Nvidia is SunTrust Robinson analyst William Stein. He wrote: “We expect NVDA’s stock to outperform owing to superior positioning in gaming, server acceleration/AI, & autonomous driving markets. We see demand improving across the chipmaker’s’ end markets. Nvidia is being more aggressive with its suppliers in terms of pricing, which may lead to higher profit margins in the coming quarters.” Stein’s $216 price target implies an upside of 21%.” data-reactid=”35″>Also bullish on Nvidia is SunTrust Robinson analyst William Stein. He wrote: “We expect NVDA’s stock to outperform owing to superior positioning in gaming, server acceleration/AI, & autonomous driving markets. We see demand improving across the chipmaker’s’ end markets. Nvidia is being more aggressive with its suppliers in terms of pricing, which may lead to higher profit margins in the coming quarters.” Stein’s $216 price target implies an upside of 21%.
Nvidia’s Moderate Buy from the analyst consensus is based on 27 ratings, including 20 buys, 5 holds, and 2 sells. The $188 average price target suggests a 5.66% upside from the share price of $178.
<h4 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Chipotle Mexican Grill” data-reactid=”45″>Chipotle Mexican Grill
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The popular Mexican eatery has staged a remarkable turnaround from a year ago, when it was mired in a series of food-borne illness scandals. No restaurant chain can grow while the customers think they’ll get sick, and Chipotle (CMG – Get Report) stock slumped to a low of $251 in February of this year. It was a 66% drop from the stock’s pre-scandal peak.” data-reactid=”46″>The popular Mexican eatery has staged a remarkable turnaround from a year ago, when it was mired in a series of food-borne illness scandals. No restaurant chain can grow while the customers think they’ll get sick, and Chipotle (CMG – Get Report) stock slumped to a low of $251 in February of this year. It was a 66% drop from the stock’s pre-scandal peak.
Chipotle’s turnaround began in early 2018, when the company brought in Taco Bell’s CEO Brian Niccol to take over. Niccol oversaw improvements to the supply chain and the in-house hygiene procedures, and his tenure has brought results: the chain’s reputation is improving, and the stock is up 89% year-to-date.
The company’s 3-month gain is 12.6%. Chipotle’s momentum has pushed the share price well above the average price target, and the analyst stance is starting to shift. The most recent reviews include 4 buys and 1 hold.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The hold comes from 4-star analyst Andy Barish of Jefferies. Barish said, “We continue to appreciate CMG’s brand reinvigoration, and believe the rebuilt mgmt team & various strategic initiatives provide a long runway for growth ahead.” He remains cautious – as indicated by his hold on the stock – but also raised his price target to $820.” data-reactid=”49″>The hold comes from 4-star analyst Andy Barish of Jefferies. Barish said, “We continue to appreciate CMG’s brand reinvigoration, and believe the rebuilt mgmt team & various strategic initiatives provide a long runway for growth ahead.” He remains cautious – as indicated by his hold on the stock – but also raised his price target to $820.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Take a more bullish stance on CMG is Katherine Fogertey, from Goldman Sachs. She sees reason for optimism in the company’s menu improvements. “Chipotle Mexican Grill’s menu innovation is showing positive early reads while digital metrics suggest continued strong traffic growth this quarter on the digital ecosystem… Chipotle has got it right with Queso Blanco. The feedback from the testing sites has been overwhelmingly positive, with sell outs and restocks being a repeated issue. We believe the new Queso could drive comps and remains confident in our bullish view on Chipotle…” Fogertey’s $1,000 price target suggests a 22% upside to the stock.” data-reactid=”50″>Take a more bullish stance on CMG is Katherine Fogertey, from Goldman Sachs. She sees reason for optimism in the company’s menu improvements. “Chipotle Mexican Grill’s menu innovation is showing positive early reads while digital metrics suggest continued strong traffic growth this quarter on the digital ecosystem… Chipotle has got it right with Queso Blanco. The feedback from the testing sites has been overwhelmingly positive, with sell outs and restocks being a repeated issue. We believe the new Queso could drive comps and remains confident in our bullish view on Chipotle…” Fogertey’s $1,000 price target suggests a 22% upside to the stock.
CMG has a Moderate Buy from the analyst consensus, derived from 12 buy, 7 hold, and 4 sell ratings assigned in the last three months. As noted above, the stock’s share price has jumped above the average price target, and analysts are now starting to adjust to the new price circumstance. CMG share sell for $819.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Visit TipRanks’ Trending Stocks page, and find out which stocks have the most recent analyst reviews.” data-reactid=”60″>Visit TipRanks’ Trending Stocks page, and find out which stocks have the most recent analyst reviews.
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