Nike Has 'Stronger Revenue Growth Ahead,' Says Bullish Goldman Sachs

Nike Inc (NYSE: NKE) offered heavy discounts, going up to 60% on even fresh stock, during Black Friday and Cyber Monday as bargain-conscious shoppers increased their online spend.

While the company’s near-term challenges are “well understood,” its growth and margin prospects are improving, according to Goldman Sachs.

The Nike Analyst: Brooke Roach initiated coverage of Nike with a Buy rating and a price target of $139.

The Nike Thesis: Although Nike faces market share gains by some competitors, wholesale channel pressures, and fading tailwinds from earlier growth drivers, these challenges are already reflected in its stock valuation, Roach said in the initiation note.

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“Cleaner inventories, moderating product cost inflation, tailwinds from freight/logistics, and improving inventory health represent clear margin expansion opportunities which build into F2H, and headwinds from FX are beginning to moderate,” the analyst wrote.

“Additionally, we see room for stronger revenue growth ahead as the company cycles tough compares and reaccelerates its innovation and marketing engine into 2024,” she added.

NKE Price Action: Shares of Nike had risen by 0.38% to $115.59 at the time of publication on Tuesday.

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