12:38 PM EDT, 05/24/2024 (MT Newswires) -- Nike ( NKE ) is now positioned for slight fiscal fourth-quarter revenue growth while its fiscal 2025 guidance may imply a back-half acceleration in sales, RBC Capital Markets said Friday.

The brokerage is guiding for sales of $13.01 billion, implying growth of 1% on a reported basis and 2% at constant currencies. That's up from RBC's prior sales estimate of $12.53 billion, which implied a decline from the $12.83 billion Nike ( NKE ) reported the year earlier. The average analyst estimate in a Capital IQ survey is for $12.91 billion.

Direct-to-consumer sales are expected to rise 1% in constant currency terms to $5.67 billion while wholesale revenue is seen climbing 3% to $7.21 billion, according to the report. Wholesale should benefit from a "significant easing" of year-over-year comparisons, according to RBC analyst Piral Dadhani.

For fiscal 2024, RBC is forecasting revenue of $51.76 billion, up from its prior view of $51.28 billion and above the $51.69 billion consensus view. Its full-year adjusted earnings per share target was lifted to $3.47 from $3.44 but remains below the $3.71 Wall Street forecast.

Nike's ( NKE ) shares are expected to remain range bound until management can provide transparency around its product pipeline and category strategy, according to Dadhani, who reiterated a sector perform rating and a $100 price target on the stock.

"Nike's ( NKE ) equity setup is heavily dependent on the implied path to return to positive revenue growth, which we do not expect until early 2025," he said. RBC prefers Adidas in its sporting goods coverage due to more favorable brand and product momentum.

Looking ahead, the brokerage is anticipating management to guide fiscal 2025 revenue growth in the low-single-digit percentage range. Since the athleticwear company already guided for a low-single digit revenue decline in the year's first half, RBC's model implies back-half growth in the mid-single-digit range. RBC lowered its fiscal 2025 revenue estimate to $52.51 billion from a prior view of $53.02 billion. The Capital IQ consensus is for $52.61 billion.

RBC's base case is for adjusted EPS of $3.88 in 2025, up from its earlier $3.84 outlook but below the $3.96 average analyst estimate.

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