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Nike Stock Price Rally Is Sustainable, Analysts Say

Nike stock price

Nike (NYSE: NKE) stock price has been experiencing a steady upside momentum since the beginning of this year. The upside trend is backed by robust financial numbers and growth across all regions.

Its strategy of investing in digital transformation is contributing to revenue growth. Its shares rallied 26% year to date.

Nike stock price has recently hit an all-time high of $96 a share. The shares are currently trading slightly below from all-time high. Meanwhile, market pundits are seeing headwinds for retailers all over the world.

NKE NIKE, Inc. daily Stock Chart

Barclays, Credit Suisse, Oppenheimer has cut ratings for retail and apparel companies. However, they believe Nike is among the best companies with significant penetration in global markets.

Analysts are Bullish on Nike Stock Price Amidst Tailwinds for the Industry

Credit Suisse indicates a tough time for the entire industry ahead; they claim macro pressures are weighing on the industry. Credit Suisse says shorter holiday shopping calendar, tough weather, and ongoing tariff/tourism uncertainty could create short-term downtrend.

On the other hand, Barclays started covering U.S. apparel, specialty retail and e-commerce with an overall Neutral view. Fortunately, analysts are presenting a positive outlook for Nike.

Barclays says Nike is among the top picks in retail. The bank believes Nike’s international growth along with a higher margin direct to consumer growth is setting its footprints for long-term success.

Financial Numbers Support Upside Trend

The largest athletic footwear and apparel brand has generated year over year revenue growth of 7% in the first quarter. Its earnings per share increased 28% to $0.82, thanks to strong gross margin expansion.

Our targeted strategic investments are accelerating NIKE’s digital transformation and extending our competitive advantage,” said Andy Campion, Executive Vice President and Chief Financial Officer, NIKE, Inc.

Its strategy of reducing the outstanding number of shares is also supporting earnings growth. The company has bought almost 11.9 million shares in the latest quarter and its plans to buy $15 billion of common outstanding stock in the next few years.

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.