Nike Inc (NYSE:NKE) shares are just doing it, grinding higher to push above the $60-a-share level on Thursday for the first time in about a year, setting up a retest of its December 2015 high near $67 — which would be worth a 10%-plus gain from here. NKE stock is enjoying a lift as a result of solid earnings growth, a rebound in its North American business and the troubles suffered by competitors such as Under Armour Inc (NYSE:UA, NYSE:UAA).
Morgan Stanley analysts recently updated the stock and assigned a $68 price target — basically, announcing the belief that all-new highs are on the way. Raymond James analysts are even more aggressive, looking for a price target of $71.
NKE Stock by the Numbers
On June 29, the company reported a quarterly earnings beat and confirmed during earnings call that the company is early stages with a new pilot program in collaboration with Amazon.com, Inc. (NASDAQ:AMZN) that would have the company sell directly on the e-commerce platform instead of relying on third-party sellers. Expense control is also kicking in for NKE stock, down 4% from the year-ago period.
Another highlight is the growing success in China — compared to stumbles by other popular consumer multinationals like Apple Inc. (NASDAQ:AAPL) in the Middle Kingdom — where sales increased 11% from a year ago. Nike has been revamping stores there and increasing its online efforts in collaboration with Alibaba Group Holding Ltd (NYSE:
BABA).
The company will next report results on Sept. 26 after the close. Analysts are looking for earnings of 49 cents per share on revenues of $9.1 billion. Shares trade at a discount to its nemesis Adidas AG (ADR) (OTCMKTS:ADDYY), with a 24x 2018 price-to-earnings multiple vs. 36x multiple for its German rival. NKE’s share price gains and fundamental tailwinds were the focus of .
Anthony Mirhaydari is founder of the (ETFs) and (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
