According to Drbul, "there is pent-up demand for apparel" in 2021 thanks to the "optimism surrounding a vaccine and the return to some element of normalization."
Nike should also benefit from favorable tailwinds with room for its market share lead to grow materially thanks to its digital offering expansion.
Nike shares rose initially in Wednesday morning trading but were lately falling 0.55% to $140.79.
Overall, Guggenheim has an improved outlook for the retail segment with department stores and apparel companies benefiting from numerous tailwinds in the new year.
This improved outlook is driven by "optimism surrounding a vaccine and the return to some element of normalization," Drbul said.
The firm says there is "pent up demand for apparel" as a category, and reiterated buy ratings for VFC Corp. (VFC) - Get Report and PVH Corp (PVH) - Get Report. PVH's price target was raised by Guggenheim to $110 from $100, while VFC's was kept at $100 per share.
PVH shares gained 2.11% to $95.42 while VFC shares rose 1.03% to $85.63.