Nike (NKE) - Get Report saw a price-target hike from Morgan Stanley analysts, even as the stock has beaten the hot S&P 500 in 2019. 

Analyst Kimberly Greenberger in a note raised her price target on the Beaverton, Ore., athletic-apparel and -equipment company to $118 from $108.

The new target represents 26% upside from the stock's current level. The stock has gained 26% for the year, compared with the S&P 500's 25% gain. On Monday at last check the stock was up 0.2% to $93.40, as the broader U.S. market fell. 

"As a result of rolling forward our discounted cash flow, we revise our bull, bear, base and price target values upwards," Greenberger wrote. "Our investment thesis is unchanged, as we continue to see Nike's bull case playing out."

Her bull case on the stock is now $138, which represents 48% upside. By rolling over the valuations, she is now pricing in her expected 2020 earnings per share for the athletic wear giant, with her estimate at $3.02. Her forward one-year multiple is 39, bringing her price target to its new level. 

Greenberger says "Nike is in the early innings of transition from a traditional wholesale business to a digitally driven, direct-to-consumer brand."

Nike has recently seen solid digital-sales growth, which has driven its market-share gains, and Greenberger expects this to continue.

Nike's direct-to-consumer business is digital-centric, as the company has recently rolled out its own app around the world. Nike, which is currently relying on its own brand strength, recently stopped selling through Amazon(AMZN) - Get Report

Plus, the direct-to-consumer business is a wider-margin one, "driving our 18%-plus five-year base case EPS compound annual growth rate," Greenberger said.

As revenue for Nike grows, Greenberger forecasts, the operating margin should expand to above 14.5% by 2022 from roughly 13% this year.

For her bull case to play out, she says, the market for activewear products must expand at a faster rate and Adidas (ADDYY) would have to see slower-than-expected sales momentum.

Consumer spend around the globe, which has seen shown some warning signs of late, is a risk to Nike, as is an escalation in tariffs. 

Greenberger is particularly bullish, as the average Wall Street analyst prices Nike at $102. 

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