Nike (NYSE: NKE) stock price sustained the upside momentum after several major analysts predicted a bright outlook for the following years. The world’s largest sports footwear & accessories company has been growing at a double-digit rate over the years. The market pundits are seeing the acceleration of growth trend due to its product innovation, extensive market penetration and brand recognition.
Nike stock price soared more than 22 per cent in the last twelve months; extending the three-year rally to 82 per cent. NKE share price is currently trading around the highest level of $105. The majority of rating firms have lifted their price targets following its robust financial results in the latest quarter.
Analysts See More Upside for Nike Stock
BMO Capital Markets provided an Outperform rating with the price target of $110. “We believe NKE’s size and budget/ability to spend proves a key, long-term competitive advantage for the company,” BMO analyst Simeon Siegel said. The analyst predicts that NKE share price could hit $130 if the company successfully sustains the top and bottom-line growth.
UBS sets a price target of $136 and assigned a buy rating. Its analyst Jay Sole is showing confidence in Nike’s product innovation along with investments in e-commerce business. Wells Fargo, on the flipside, claims that U.S. apparel/footwear market could grow at a double-digit rate, which will enhance revenue growth trends for major brands.
Financial Numbers Are Supporting Analysts Sentiments
The company had generated revenue growth of 10 per cent in the latest quarter, driven by a 10 per cent increase in footwear and a 12 per cent growth from the apparel segment. The diluted earnings per share rose by 35 per cent year over year in the latest quarter. The strong revenue growth, selling and administrative expense leverage, gross margin expansion, and a lower average share count helped in generating massive earnings growth.
“As we deliver a relentless flow of innovation and scale Nike’s digital advantage, we are positioned for even greater competitive separation and long-term shareholder value creation,” notes Chief Financial Officer Andy Campion.
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