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SBJ/June 19 - 25, 2000/Finance
Nike climbs after dip
Published June 19, 2000
Nike Inc. shares fell sharply but recovered somewhat after a Wall Street analyst's report that the sneaker giant's stock is likely to stagnate for a while.
Nike shares plunged 11 percent before recovering to close at $40.40 on June 12, the day Goldman Sachs analyst Margaret Mager reiterated a moderate outlook rating on the stock.
"Nike franchise remains strong but stock likely to tread water until improving retail trends translate into more robust orders and upward [earnings estimate] revisions," Mager wrote.
Mager cautioned that expenses at the Beaverton, Ore.-based company could jump because of advertising costs associated with the Olympics and European soccer. Mager wrote that it is difficult to figure out what is going on at Nike because of a number of "moving pieces" in the company's numbers, including the drop in the value of the euro.
Mager said the company will continue its long-term growth mainly through sales in foreign markets, combined with "modest market share gains" in the United States. Growth could be boosted by acquisitions, Mager wrote, adding that acquiring other firms is "something that Nike is beginning to more actively consider."