Skip to main content

Just Buy It: Nike Is Best 2022 Idea at Guggenheim

'Nike is the leader in the athletic (and broader active/athleisure) industry with favorable secular tailwinds,' Guggenheim says.
  • Author:
  • Publish date:

Guggenheim Securities named Nike  (NKE) - Get NIKE, Inc. Class B Report its best idea for retailing/specialty soft lines in 2022, based on fundamentals.

“Nike is the leader in the athletic (and broader active/athleisure) industry with favorable secular tailwinds,” Guggenheim analyst Robert Drbul wrote in a commentary. “The brand commands dominant market share.”

And he expects that share to grow, as “digital scales further, new product innovation remains robust, and heavy investment behind key growth drivers continues, while some global peers operate more cost-consciously in an uncertain environment.”

Drbul rates Nike a buy with a $195 price target. It recently traded at $167.98, up 0.78%. The price target indicates 16% potential upside.

To be sure, “the company is being impacted by short-term operational dynamics (shipping delays combined with longer-than-expected shutdowns and reopening of factories in Vietnam),” he said.

TheStreet Recommends

But “we believe the long-term financial framework the company laid out last June remains quite attainable.”

Further, “We are confident the Nike team can leverage its Covid experience to mitigate the negative logistics impacts by employing the seasonless approach to serve the consumer demand,” Drbul said.

“While concerns on geopolitical issues linger for Nike in China, we are confident in its brand strength and its innovative leadership in the region.

“We believe this concern presents an opportunity for long-term investors as NKE continues to deliver and innovate products that connect with local consumers by promoting healthy lifestyle and other important societal themes.”

Drbul increased his earnings-per-share estimate for 2023 to $4.85 from $4.50 and for 2024 to $5.70 from $5.27.