JPMorgan has given a bullish rating on Nike Inc. (NYSE: NKE), a sportswear and footwear maker. NKE rose 4.68 percent to $133.46 as a result of this.
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Despite the COVID-19 epidemic, JPMorgan analyst Matthew Boss expects fourth-quarter Nike sales to increase in China. Consumer spending is picking up again, while inventory levels are still low. In light of this, JPMorgan reiterated its “over market” rating for Nike stock, setting a $164 target price.
UBS investment bank analyst Jay Soule is similarly optimistic. After consulting with Nike’s chief financial officer, he restated his buy recommendation for NKE shares.
Nike is able to show an increase in online sales in North America, according to a UBS analyst. Due to the coronavirus, Nike is conservatively expecting single-digit sales growth in 2022. However, digital sales increased by 19 percent in the quarter ended February 28, 2022.
At the same time, the gross margin grew by 1% to 46.6%, owing to the fact that Nike did not need to make substantial discounts due to lower inventory and rising demand. In most cases, direct sales are more profitable than wholesale.
Nike’s products are popular among young people, which is a strong positive indicator of long-term sales growth. The firm is also attempting to incorporate cutting-edge technology with traditional shopping, such as 3D body scanning to design the most comfortable apparel. The prospect of using the Internet to host online presentations and other activities to attract a younger audience is also being investigated.
NKE is down -0.71% over the last year and up 2.72 percent over the last week in terms of performance. The stock’s price index is up 3.31 percent in a month and down -11.17% in three months. In the last six months, it has returned -16.70 percent.