Nike’s stock price closed Friday by more than 15%, hitting a record intraday high. Previously, the sneaker manufacturer predicted that as its North American business rebounds from the lows of the coronavirus pandemic, its annual sales will exceed $50 billion.
Sales in Greater China appear to be improving. Nike management stated that the company is confident of regaining the trust of local customers because Western brands have expressed concerns about suspected forced labor in Xinjiang and they threatened to boycott these brands.
Nike CEO John Donahoe said on Thursday night’s earnings call: “Now is the time when strong brands can become stronger, and this reality will become clearer every quarter.”
Nike shares closed up 15.5% to $154.35. At one point, the stock price hit an intraday record high of US$154.59. The retailer with a market value of more than $243 billion last saw its stock price hit a record high of $147.95 on December 21.
Globally, as more and more people start to socialize again, Nike is seeing shoppers buying new sneakers and fashionable sportswear. The company’s Jordan brand has always been a special highlight.
In the three-month period ending May 31, Nike’s total revenue nearly doubled from 6.31 billion US dollars a year ago to 12.34 billion US dollars, surpassing Wall Street’s expectations of 1 billion US dollars. In North America, Nike’s largest market, sales more than doubled to a record $5.38 billion.
After Nike announced optimistic fourth-quarter results on Thursday afternoon, Cowen & Co. analyst John Kernan raised his target price from US$145 to US$181. Kernan said that he believes the company’s market value will one day exceed 300 billion U.S. dollars.
He said in a report to clients: “The confidence of management is showing an inflection point. The results of the fourth quarter show that the development of digital-driven financial models is accelerating.”
According to Telsey Consulting Group analyst Cristina Fernández, Nike is adopting its membership program, higher full-price sales, greater use of data, and smarter wholesale models with strong partners such as Foot Locker. Benefit from establishing closer ties with customers.
“The strong global momentum of the Nike brand is enough to offset China’s pressure and supply chain constraints,” Fernandez said in a report to customers.
After Nike’s fourth fiscal quarter was released, at least 12 brokerage firms have raised their price targets for Nike stock. According to data from FactSet, the median price target of the analyst responsible for the company is now $176.90.
Credit Suisse analyst Michael Binetti said: “The company is evolving from the Covid era into the largest [profit and loss] in our coverage.” He added that Nike guarantees “a significant valuation premium” compared to other global apparel and footwear brands.