Nike Inc. (NYSE: NKE) increases over 1.8% in pre trading session on Monday after the analyst Rick Patel began coverage of Nike (NKE) at Outperform, with a price objective of $99 set. Patel’s endorsement comes as investors have been dismayed by recent commentary on how excess inventory, supply chain snafus, and sluggish consumer demand have reduced profitability.
Rick B. Patel of Raymond James began coverage on Nike Inc (NYSE: NKE) with an Outperform rating and a price target of $99. According to the analyst, Nike’s sales could increase by more than $7 billion from pre-COVID through the end of FY23, while operating profit will rise below $100 million owing to temporary margin challenges.
Patel also stated that Nike shares are down 47% year to date due to the negative impact of increased inventories, China difficulty from COVID policy, and general consumer behavior worries. Following the guide-down in Q1 FY23, the analyst feels that much of the bad news has already been priced into the stock.
He believes Nike has a strong underlying demand and brand strength. He sees NKE in the midst of a multi-year transition to a direct-to-consumer (DTC) strategy. According to Patel, the transition, spearheaded by Digital, will offer significant tailwinds for sales and profitability expansion.
On October 10, Nike (NKE) announced that it has signed Bronny James, the son of NBA superstar LeBron James, to a name, image, and likeness agreement.
The younger James, who just turned 18 last week, was one of four high school and college athletes to sign contracts with the sports footwear and clothing manufacturer.
“Nike has been a part of my family for as long as I can remember,” Bronny James said in a statement, according to ESPN. “Having the opportunity to work with them and continue my family’s history on the court and in the community is incredible; it means a lot to me.”
Nike’s relationship with the James family is strengthened as a result of the agreement. Back in 2015, the older James inked a lifetime contract with Nike that purportedly pays him tens of millions of dollars.
Some of the country’s top universities are interested in recruiting the high school senior.
