Analyst Virginia Genereux says that while the company's valuation appears reasonable, she sees some headwinds. She notes third-quarter earnings per share consensus looks high to her at 97 cents.
She believes Nike will be negatively impacted by S&P's transition to free float index, noting Nike is the fifth biggest weight loser in market cap. She feels Nike's shift from one-brand company to multi-brand will ultimately command a lower multiple.
Another risk is the uncertainty around the company's new management regime--Phil Knight may diversify his Nike holdings. She Genereux notes athletic footwear and apparel end market growth is slowing everywhere except China.