Nike upgraded on 'lean' inventory, direct-to-consumer shift
Nike Inc. was upgraded to overweight from neutral at Piper Jaffray on a number of factors including the company's "lean" inventory, its shift to direct-to-consumer sales, its product pipeline and expansion in China. Piper Jaffray raised its price target to $93 from $72. Analysts led by Erinn Murphy think the athletic category is an "extremely healthy" one with North America tracking for acceleration thanks to inventory improvements. "Consumer shift to digital commerce is a significant tailwind for athletic brands given low Amazon risk and the accelerating increase in revenue per unit it is driving," analysts wrote. Analysts think both Nike and Adidas AG can be winners, with both contributing equally to category growth and the shift to digital keeping Amazon.com Inc. at bay. Susquehanna Financial Group also upgraded Nike on Monday. Nike shares are up 3% in Monday trading, and 31.3% for the year to date. The S&P 500 index has gained nearly 7% for the period.
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