9 Analysts Upgraded Nike’s Stock This Year — Here’s Why

While some U.S. retailers are preparing for slowing growth- and trade-related headwinds in 2019, Nike is looking as strong as ever.

On Tuesday, the sportswear giant’s stock was upgraded to “outperform” by Cowen, which cited a strong product lineup and effective investments in speed to market as factors that are likely to improve the company’s profitability in 2019. The investment bank’s analysts, led by John Kernan, also raised their target price for the stock to $90, from $80, the latter of which the company surpassed last week.

“We view Nike gross margin and the concept of Speed as key catalysts to near-term and multiyear upside,” Kernan wrote in a note to clients. “Prospects remain solid for continued higher full-price sell-through and ASP lift, which could drive gross margin above expectations.”

Kernan’s bullishness is shared by most of his peers: Since August, nine analysts have upgraded the stock, while only one has downgraded it — to “neutral,” from “buy.” Nike was the third-best-performing Dow stock of 2018, and it has jumped another 8 percent since Jan. 1.

In a December note, Canaccord Genuity’s Camilo Lyon reiterated his $95 price target and wrote: “As we look to the second half of fiscal 2019 and beyond, we are confident that Nike’s robust product pipeline — coupled with an intensifying focus on digital, increasing scale of Express Lane and elevated customer experience at retail — will continue to deliver outsized growth across all the key growth catalysts well beyond fiscal 2019.”

He cited the upcoming launches of the Air Max 720 and the self-lacing Hyperadapt 2 as potential revenue drivers, as well as the House of Innovation flagships in New York and Shanghai, both of which are “exceeding expectations.”

In January, Nomura Instinet’s Simeon Siegel pointed to the company’s resilience in the face of China’s economic slowdown, along with its gross margin expansion and unit growth. “We reiterate our Buy, given a healthy inventory positioning, coupled with our belief that scale provides Nike a long-term competitive advantage,” Siegel wrote in a note.