Nike stock could explode another 50% after monster earnings report: analyst

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Nike shares is shaping up to be a slam dunk in investors’ portfolios for the foreseeable future after an explosive earnings report on Thursday night sent stocks soaring, most analysts say.

“[Nike] shares are expected to rise another 50% from here,” Jefferies analyst Randal Konik said in a research note to clients. Konik considers Nike his top pick with a price target of $200.

Konik added, “Nike is one of the best brands on the planet, the global consumer is very strong, the company is strengthening its connection with its consumer through technology, and the company’s distribution model is moving away from All of this means that NKE should see strong absolute and relative revenue growth, increased margins and accelerated EBITDA$ [earnings before interest, taxes, depreciation and amortization] and free cash flow.”

It is difficult to dispute this position.

The footwear giant posted record sales in North America for its fourth fiscal quarter. Sales jumped 141% compared to last year and 29% compared to the fourth quarter of 2019 (i.e. before the pandemic). Digital sales soared 147% from the fourth quarter of 2019. Even sales in China – where Nike has been swept up in consumer protests over its stance on Xinjiang – have increased across all product categories over the past quarter (led by a 34% increase in equipment sales) . Jordan brand sales increased 31% to $5 billion in Nike’s just-ended fiscal year.

NEW YORK, NEW YORK – FEBRUARY 22: A taxi drives past the Nike store on February 22, 2021 in New York City. NIKE, Inc. (NYSE:NKE) will trade ex-dividend in the coming days as NIKE earnings have been nearly flat for the past five years. (Photo by John Smith/VIEWpress via Getty Images)

Nike’s stock jumped 13% to $149.50 in premarket trading on Friday. Investors also welcomed Nike’s very optimistic outlook for the full year. The company is seeing sales top $50 billion for the first time and gross profit margins increasing in the range of 125 basis points to 150 basis points.

Given the scale of Nike, analysts believe Nike’s outlook is shocking and achievable.

Nike’s size and budget are proving to be a key long-term competitive advantage. The brand has no equal in history when it comes to size/reach in North America. With a leading advertising budget fueling industry-leading dollar growth, we expect continued gains,” said BMO Capital Markets retail analyst Simeon Siegel.

Siegel reiterated an outperform rating on Nike and issued a price target of $174.

Yahoo Finance Board Wade contributed to this story.

Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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