Nike has never been an underdog, but it sure seems that way lately.
The shoe giant has struggled all year, with its shares falling 18%, as it's been overshadowed by smaller competitors like Under Armour and Adidas. Its recent earnings report beat analysts' expectations, but its estimates of orders set to be delivered over the next six months were flat, indicating there are more troubles ahead.
Wall Street analysts have been trying in vain to convince investors that the sky is not falling, (or the other shoe isn't dropping?). On Tuesday, Credit Suisse analyst Christian Buss issued a report that praises Nike's recent performance, considering the circumstances. In other words, he's not thrilled with Nike's results, but they could be worse.
In particular Buss thinks the company's results in North America and Europe are not nearly as bad as feared, that the company's margins are in better-than-expected shape. And Nike is working on tightening its belt, keeping its expenses in check.
With the stock down so much this year, this relative success could be enough for a comeback. He thinks shares could rise to $60 from a recent $51.29.
That said, there is one big problem the company can't solve on its own – the increasing strength of the dollar.
"Unfortunately, currency is moving against the company, suggesting that underlying reported earnings growth is not likely to re-accelerate faster than anticipated."
Big Picture: Nike is in better shape than investors realize, one analyst wrote.
