The stock represents an unusual buying opportunity following a sell-off that has left its shares down 12% year-to-date, analysts at Wells Fargo said.
Shares of the sportswear company (ticker: NKE) were nearly flat in pre-market trading, gaining 0.3% to $146.50, while futures on the
were down 1.4%. Analyst Kate Fitzsimmons updated Equal Weight’s overweight headline on Tuesday morning, with a price target of $175.
“We see favorable risk/reward and view the pullback as a rare buying opportunity for this premier global sports name, particularly ahead of the acceleration in trends in FY23,” Fitzsimmons wrote in a statement. research note.
She said the company is poised to benefit from factors such as product innovation enabling growth in categories where
progressed less, such as women’s and children’s clothing. Additionally, Fitzsimmons said, direct-to-consumer sales could account for 60% of the total by 2025, a shift driven by the company’s app, which has 300 million users.
Fitzsimmons also cited recent improvements to Nike’s distribution channels in China, suggesting the brand may improve after seeing less revenue than expected. In September, the company announced results that beat profit forecasts but missed sales. Supply chain congestion hurt revenue more than expected; China saw the smallest gain of any of Nike’s geographic markets, with an 11% increase in sales. The region was previously one of Nike’s main sources of revenue.
Fitzsimmons said that despite the possibility of continued volatility, sales in North America and Europe remain stronger than pre-pandemic levels and should help bolster topline numbers.
Write to Logan Moore at [email protected]