Nike stated in its most recent earnings report that it expects supply chain issues to persist into the fiscal year 2022. However, the supply issues are so severe that BTIG believes they will have a significant impact on Nike’s holiday sales.
“We believe the risk of significant cancellations beginning this holiday season and continuing through at least next spring has materially increased for NKE, as it now faces at least two months of virtually no unit production at its Vietnamese factories, which accounted for 51% of footwear and 30% of apparel units (43 percent of total units) last year,” the note said.
BTIG dropped its price target of $177 per share.
General Mills stock
Analyst Robert Moskow downgraded General Mills from outperforming to neutral.
“To account for the recent acquisition of pet treat brands, management increased to the high end of its profit and EPS range ‘mostly’.
To be sure, Credit Suisse noted that General Mills has a history of raising prices, which could help it offset these cost pressures.
This year, General Mills stock has been mostly flat, underperforming the broader market. On September 22, the company will report its fiscal first-quarter earnings.
Analyst Curt Woodworth downgraded the mining stock from neutral to underperform.
“We forecast copper prices to revert to more historical levels relative to cost support in 2022, as the benefits of massive global stimulus begin to fade and inflation concerns ease as supply bottlenecks are gradually alleviated,” according to the note.
According to Credit Suisse, the rise in copper prices earlier this year appeared to be related to inflation expectations rather than supply and demand, so the price could fall even if the global economic recovery picks up steam.
According to Woodworth, Freeport-stock McMoRan’s is strongly correlated with the price of copper, and both struggled once the stimulus from the financial crisis wore off last decade.
“The central question confronting investors is whether the post-stimulus unwind will result in a similar deflationary spiral to 2011-16, when copper prices fell 57 percent and FCX share price fell 93 percent (Jan-11 to Jan-16), or if we are set for a period of above trend inflation and demand growth, leading to sharply higher 10 year BE or physical shortages,” the note said.
Little interest in the iPhone 13
According to a note to investors issued by Piper Sandler on Thursday, the firm conducted a survey of 1,000 American customers, with only 6% indicating that they would make the switch. Last year, 10% of respondents said they would upgrade in the same survey.
“Not surprisingly, enthusiasm for the iPhone 13 is somewhat waning, as information is still scarce until the launch event next week,” Piper said. “Without pricing and new features, mobile stores cannot speak to the iPhone 13, and consumers are unaware of the value they are receiving.”
The firm, on the other hand, is unconcerned about the preliminary survey. Indeed, Piper Jaffray raised its price target on Apple stock to $175 from $165. The new target represents a 13% increase from the previous day’s close.
And, according to Piper Sandler, conversations with AT&T, Verizon, and T-Mobile stores show that demand for the iPhone 12, which was released in October, is still high. This demand is being driven primarily by 5G upgrades and trade-in offers. Piper added that this could benefit Apple by increasing the average selling price and bringing more iPhone users onto the 5G network.
According to Piper Sandler, the event could be a catalyst for increased demand for the iPhone 13.