Brean Capital Sees Newest Nike Inc (NKE) Partnership as Long-Term Game Changer
Brean Capital thinks Nike's strategic supply chain partnership will become an important trend in meeting consumer demand
Nike Inc (NYSE:NKE) is strategically joining forces with affiliates of Apollo Global Management in a partnership to create a vertically integrated supply chain ecosystem for apparel manufacturing in North and South America. On the heels of this alliance, Brean Capital analyst Eric Tracy remains bullish on the athletic retailer giant, reiterating a Buy rating on shares of NKE with a price target of $62, which represents a 5% increase from where the shares last closed.
For the analyst, this is an acquisitive partnership at its most diverse. Particularly highlighting purchases of apparel manufacturer New Holland and embellishment, warehousing, and logistics operator ArtFX, Tracy commends Nike as it broadens its production capabilities across the value chain. Even though Tracey sees that this partnership remains in its “early days,” he expresses confidence that advanced manufacturing might transform the giant’s model as a marked long-term game changer.
Tracy concludes, “While terms weren’t disclosed, we view this as a further step down the road towards disruptive manufacturing technology (and local for local in particular), a trend we believe can ultimately be a game changer over the long term as vendors can leverage reduced lead times and enhanced customization to more seamlessly meet consumer demand.”
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, five-star analyst Eric Tracy is ranked #104 out of 4,122 analysts. Tracey has a 66% success rate and realizes 14.1% in his annual returns. When recommending NKE, Tracy earns 7.4% in average profits on the stock.
TipRanks analytics demonstrate NKE as a Buy. Based on 21 analysts polled in the last 3 months, 15 rate a Buy on NKE, while 6 maintain a Hold. The 12-month price target stands at $63.70, while marking just under an 8% upside from where the stock is currently trading.
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