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'100lb Gorilla in Sportswear': RBC Starts Nike at Outperform, Sees 25% Upside

Stock Markets Sep 22, 2022 09:26AM ET
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© Reuters. '100lb Gorilla in Sportswear': RBC Starts Nike at Outperform, Sees 25% Upside
 
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By Senad Karaahmetovic

Nike (NYSE:NKE) shares are up almost 1% in premarket after an RBC Capital Markets analyst initiated research coverage with an Outperform rating and a $125 per share price target.

Nike is described as a “100lb gorilla in sportswear with #1 market share” that could see its shares rally on the expected China recovery.

“Nike brand desirability in China remains healthy based on RBC consumer survey and Nike app downloads in July/August have accelerated supporting future growth. Our recent Asia Luxury Virtual Tour feedback and Pou Sheng August revenue disclosure points to gradual western sportswear recovery in China,” the analyst said in a client note.

Interestingly, a Barclays analyst cut the rating on Nike shares yesterday, citing weaker China trends.

Still, the RBC analyst also believes investors see Nike as a more “defensive” consumer stock due to its “product range desirability in Footwear, younger consumers attribute high priority to the category, and Nike has consistently gained share (+550bps since 2012).”

'100lb Gorilla in Sportswear': RBC Starts Nike at Outperform, Sees 25% Upside
 

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