Nike Inc (NYSE: NKE) has lost about 10% this year but a Deutsche Bank analyst is convinced the story moving forward will be a different one.
Nike stock has upside to $115
Krisztina Katai resumed coverage of Nike stock this morning with a “buy” rating. Her $115 price target suggests about a 22% upside from here.
The Deutsche Bank analyst is bullish as the sports footwear and apparel firm has been devoted to innovation ahead of the Paris Olympics this year. Her research note reads:
$NKE is at the onset of a multi-year innovation cycle that’s likely to deliver top-line growth ahead … with bigger share movers yet to come.
Katai pointed to high momentum and brand heat that she expects will help Nike share price improve materially in the coming months.
The analyst expects the ongoing transformation to help boost Nike’s sales and expand its market share as well in the back half of 2024. Nike stock pays a dividend yield of 1.57% at writing which makes up for another reason to have it in your portfolio.
Jim Cramer has a different opinion on $NKE
Krisztina Katai recommends owning Nike stock also because its management has decided in favour of returning to wholesale distribution. She talked of an attractive risk-reward in her research note this morning as the sportswear giant is currently trading at nearly the lowest price-to-earnings multiple in about a decade.
NKE share price could recover also because the New York listed firm has key partnerships with notable names, the Deutsche Bank analyst added.
In March, Nike reported its financial results for the third quarter that topped Street estimates but issued muted guidance for the future. At the time, John Donahoe – its chief executive said:
We’re making necessary adjustments to drive the next chapter of growth. We’re encouraged by progress we’ve seen, as we sharpen our brand storytelling and work with our wholesale partners to elevate and grow the marketplace.
Still, famed investor Jim Cramer is not convinced that it’s time to own Nike stock. “I would be very careful. I think it’s still too early. There’s a lot of competition” – that’s what he said on CNBC’s “Morning Meeting” today.
The $142 billion behemoth based out of Beaverton, Oregon is scheduled to report its financial results for the fourth quarter in the final week of June. Consensus is for it to earn 86 cents a share versus 66 cents per share a year ago.
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