Nike Faces Robust Growth Opportunities, Says Analyst - Nike (NYSE:NKE)


  • Raymond James analyst Rick B. Patel initiated coverage on Nike Inc NKE with an Outperform rating on the shares and a price target of $99.
  • The analyst said Nike’s revenue should grow by more than $7 billion from pre-COVID to the end of FY23, but operating profit will rise below $100 million due to margin headwinds that are transitory.
  • Patel added that Nike shares are down 47% year-to-date because of the negative impact of elevated inventories, China weakness from COVID policy, and general concerns about consumer behavior.
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  • After the guide-down in Q1 FY23, the analyst believes much of the bad news is priced in to the stock.
  • He views Nike’s underlying demand and brand strength as strong. He sees NKE in the middle of a multi-year journey to transform into a direct-to-consumer (DTC) model.
  • Patel said the transformation, led by Digital, will create strong tailwinds for revenue and margin growth.
  • Price Action: NKE shares are trading lower by 0.08% at $88.44 on the last check Thursday.
  • Photo Via Company


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