UPDATE 2-Nike picks up pace, says UBS; stock hits life-high

* UBS upgrades stock to buy

* Raises price target to $100 from $84

* Shares up 3 pct, touch life-high
(Adds details, updates share move)

BANGALORE, Dec 13 (BestGrowthStock) – Second-quarter trends at Nike
Inc (NKE.N: ) are better than expected, and the No. 1 player in
the athletic shoe and clothing market is seeing strong orders
at key global markets, UBS said, upgrading the stock to “buy”
from “neutral.”

Shares of the Beaverton, Oregon-based company were up 3
percent at $90.35, their highest ever, on Monday on the New
York Stock Exchange.

Nike is benefiting from solid sneaker sales in the United
States, growing demand for apparel, signs of significantly
accelerating Western European and Chinese sales, the brokerage

“China represents about 10 percent of Nike’s total revenues
today, and we believe Nike is focusing resources to double its
China revenues over the next five years,” analyst Michael
Binetti wrote in a note.

When Nike reported first-quarter results in September, the
company said orders were strong, but warned of potential
“turbulence” ahead. [ID:nN23213576]

In November, German rival Adidas (ADSGn.DE: ) said it planned
to outgrow Nike and looked to grow sales to 17 billion euros
($24 billion) by 2015. [ID:nLDE6A70B8]

Nike’s $4.1 billion net cash balance and global investment
opportunities could drive double-digit earnings growth over the
next three years, analyst Binetti said .

Nike recorded sales of $19 billion in its year to May 2010,
though it is aiming to reach $27 billion by 2015. This means it
would still be ahead of Adidas if both met their targets.

Rising earnings-per-share estimates and the brokerage’s
outlook for sustained double-digit orders growth should be
catalysts for the stock, the analyst said.

“Sustained double-digits futures growth has historically
supported a premium P/E valuation for Nike shares, giving us
comfort that Nike’s stock will continue to outperform the peer
group,” the analyst said.

Nike’s shift towards toward increased revenues from
high-margin businesses in China, emerging markets and the
global apparel segment should also help push margins, said
Binetti, who sees results from investments in domestic

“We estimate that investments with U.S. retailers are
generating returns well above Nike’s corporate return on
invested capital and … should drive outperformance versus the
S&P in coming years,” the analyst wrote.
(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by
S. John Tilak)

UPDATE 2-Nike picks up pace, says UBS; stock hits life-high