Oppenheimer Upgrades Nike Shares: ‘A Technological Revolution Is Underway’
As Nike becomes more focused on international expansion and technological advancement, Oppenheimer upgraded its rating from “perform” to “outperform” in a note to its clients Thursday.
An analyst that works for Oppenheimer, Brian Nagel, said in a note, “A technological evolution is underway at Nike, whereby management is embracing the power of digital as a means to enhance most all aspects of Nike’s business model, including consumer connections, product innovation, and manufacturing”.
“Investors have still yet to grasp fully the degree to which a now enhanced business model of Nike will help to underpin improved results at the company, near and longer term.”
In addition, Nagel said that Nike, which just last month launched an extremely controversial ad campaign centered around Colin Kaepernick, will rebound in sales as “internal initiatives started to take hold” and “the broader athletic group are now through recent woes.” (RELATED: EXCLUSIVE: Trump Critical, But Says Nike’s Kaepernick Deal ‘Is What This Country Is All About’)
Another big reason Oppenheimer predicts huge growth in Nike is the companiy’s continued expansion into the international market. “Over the next few years, the global sportswear market is expected to expand by an annual mid-single digit rate, with China and Asia-Pacific and Latin America outpacing more mature markets”, and in the 2018 fiscal year, “international accounted for over 55 percent of Nike brand revenues” Nagel added.
Oppenheimer’s new 12-month price target for Nike is set at $90 a share, which is nearly an 18% increase from Nike’s Wednesday closing price.