Though Nike’s 2023 financial results released on Thursday were “slightly underwhelming”, some of the numbers offer a positive read-across for UK thread supplier Coats Group PLC (LSE:COA), according to Peel Hunt.
Nike, which is Coats’ largest end customer, disappointed with its mid-single-digit sales growth outlook, but “from Coats’ point of view, it was good to see China recovering, the US resilient and more positive commentary on inventory”, said analysts.
Peel Hunt also noted that Nike’s inventory units reduced in the double digits year on year, with management saying they will carefully manage inventories going forward.
Coats remains a buy with a 103p price target, representing a 48% upside to Friday’s 69.5p share price.