12:42 PM EDT, 03/12/2024 (MT Newswires) -- Nike's ( NKE ) fiscal Q3 EPS could top market expectations when it releases its results March 21, with outperforming gross margin driving the upside, Morgan Stanley said in a Tuesday note.

The investment firm said it also expects Nike's ( NKE ) gross margin to outperform in fiscal Q4 as it models underlying sales growth trend to continue into the last fiscal quarter. It added that Nike ( NKE ) could keep its low guidance bar for Q4 and the full year due to recent market volatility and challenged core demand trends.

Morgan Stanley said Nike's ( NKE ) return to high-single-digit revenue growth would be a "meaningful" catalyst for the stock, but this is unlikely in fiscal Q3 and could be seen in fiscal 2025 at the soonest.

Morgan Stanley reiterated its overweight rating on Nike ( NKE ), while lowering its price target to $124 from $125 previously.

Price: 99.92, Change: -1.17, Percent Change: -1.15