Analysts of KeyBanc estimate that sportswear and footwear manufacturer Nike Inc. (NKE) shares can increase by almost 23 percent more. The organization has not yet fully recognized its potential in the area of e-Commerce and emerging technology, according to experts.
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For Nike, the COVID-19 pandemic was a big blow, as market activity was diminished by the first lockdown. The company later started to recover sales, however, and also reported a 12 percent rise in dividends. NKE shares have risen by more than 35 percent since the beginning of the year.
The catalyst of Nike’s success during the pandemic was e-Commerce. Three years ago, in late September, the company said it had achieved its online business growth targets. The pandemic, which fully altered the essence of retail, was one of the reasons for the momentum in this direction. E-Commerce now accounted for nearly 30 percent of the revenue of Nike, a threshold that the company initially expected to hit by 2023. In recent quarters, e-Commerce growth was 83 percent year-on-year.
KeyBanc analysts believe that Nike has not completely realized its e-Commerce potential, so the shares of the company will rise from the current price by about 30 percent. Overall, long-term revenues and margin growth would allow for the digital transition. The new target price of KeyBanc for NKE shares is $174.
In its long-term growth plan, Nike has consistently stressed the significance of digital technology. With a marketing campaign that attracts subscribers who constantly look for fresh deals and special promotions, the SNKRS app has created strong growth. Nike also licensed Celect’s market forecasting technology to grasp the audience better. This will help company track patterns and change inventory and logistics efficiently.
Furthermore, Nike forecasts that the pent-up demand created during the COVID-19 pandemic will benefit from as early as next year. The economic recovery will again bring back demand for outdoor clothes, as well as clothing for outdoor sports and gyms. The value of Nike’s direct sales will most likely not decrease, which will allow the company to expect a long-term increase in profit indicators.
Nike Inc. (NKE) stock closed the half session on Thursday before Christmas at $141.60.