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 Barron’s coverage back on July 20.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
