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Wendy Boyd

Analysts Upgrade Nike On $50B Revenue Potential, Direct-To-Consumer Growth

Nike Inc NKE may be stealing market share back from adidas AG (ADR) ADDYY, according to a new report from Susquehanna. 

Susquehanna's Sam Poser upgraded Nike from Neutral to Positive and raised the price target from $78 to $93.

Improved product offerings and product flow are leading Nike to market share gains from adidas and athletic specialty retailers Foot Locker, Inc. FL Finish Line and Hibbett Sports, Inc. HIBB, as well as the family footwear channel, Poser said in the upgrade note.

“Based on our proprietary checks with retailers, and with some of Nike’s competitors, it has become clear, after some concern on our end, that Nike is beginning to balance scale and scarcity well, across the spectrum of retail partners and across merchandise categories,” the analyst said. 

Better retailers are beginning to recognize that Nike’s innovative products are taking share from Adidas, which is rapidly decelerating, Poser said. Adidas' brand reported 12-percent sales growth in its second-quarter report in early August. 

Nike is on pace to hit $50 billion in revenue by 2023, the analyst said; the company initially set the target in 2015 to be completed by 2020.Source

Upside is over. We can expect a breakout of the rising wedge soon.

$NKE, NIKE INC -CL B / D