Nike (NKE) Pivot to Digital is Accelerating, Stifel Reiterates Buy
Stifel analyst Jim Duffy reiterated a Buy rating and $111.00 price target on Nike (NYSE: NKE) after F4Q results showed significant disruption but the possibility of normalized inventory in F2Q is greater than expected and direct digital growth that was >100% in May and June represents a more rapid pivot to a digital centric model.
The analyst stated "Digital direct per unit economics have higher gross margin and currently boast 2X the operating profit of wholesale suggesting leverage opportunity with scale. End market demand supportive of a $50bn revenue objective in FY23 remains unchanged yet a more direct model should only improve the margin structure and return profile of the business. We see NIKE uniquely positioned to capitalize on a shift to digital consumer engagement and continue to advocate NKE shares as a core holding for large cap growth investors".
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Shares of Nike closed at $98.20 yesterday.