His reasoning: “our positive fundamental view of NKE’s transformation to a direct-to-consumer/digital-led organization, which has driven customer engagement, elevated brand positioning, and supported margin expansion.”
Further, Komp wrote in a commentary, “With the stock underperforming about 13% year-to-date and recent concerns (supply chain, China) likely to prove temporary, … [we] view the current level as providing a more compelling entry.”
Some investors have expressed concern that China will make Nike pay the price for speaking out on labor practices in the Xinjiang region. China accounts for about 20% of Nike’s sales.
But “lasting risk in China seems limited,” Komp said.
“While current developments in China require monitoring, ... Nike's heritage of operating in the country (beginning in 1980), strong recent momentum (February-quarter sales accelerated to up 42%) and history of navigating controversial social issues will help to limit lasting impacts.”
Nike recently traded at $132.62, up 3.1%. It’s up 68% for the past 12 months. The analyst's price target indicates 17% potential upside from Thursday's closing price.
TheStreet.com’s Bret Kenwell on Thursday offered instructions about how to approach buying on Nike’s recent dip -- 6% year to date after Friday’s rise.
The company last week reported mixed earnings for the latest fiscal quarter. Earnings totaled 90 cents a share, as revenue rose 3% to $10.4 billion.
Nike trailed expectations for both metrics. Analysts surveyed by FactSet expected earnings of 76 cents a share on revenue of $11 billion.