Will Nike Run Past Competitors in 2020?


A frothing market, overflowing with abundant returns and record breaking all-time highs has been a hallmark of 2019. With so many household names’ share price touching new peaks during the year, it will be interesting to see who can keep it up in the upcoming decade.

Sports apparel and all-around ubiquitous brand, Nike (NKE), is one of those closing the decade on a high. The last week saw the global swoosh machine running up new peaks, with it currently trading at $101.57 a share, up 37% in 2019. Not to mention one 5-star analyst just cited the ticker as a top pick for 2020.

According to Guggenheim’s Robert Drbul, investors can expect much of the same for the year ahead. The 5-star analyst rates Nike as a ‘Best Idea’ for 2020 and lists a number of reasons for his confident prognosis. Prime catalysts are next summer’s 2020 Tokyo Olympic games as well as the ‘global secular trend’ of people moving towards more active and healthy lifestyles.

Nike ZoomX Vaporfly Next%

“We remain focused on the strong fundamentals and NKE’s focus on engaging with the consumer through all channels, globally, helping to offset geopolitical pressures,” the analyst said. He added, “We see several catalysts ahead, most importantly the Summer Olympics, where we expect NKE to unleash its marketing budget and innovation pipeline. We surmise NKE is primed to unveil an onslaught of innovation in the coming months and remain intrigued by the opportunity in Running, particularly given the publicity around the Nike ZoomX Vaporfly Next%.”

Drbul reiterated a Buy rating on Nike, alongside a price target of $115. Should the target be met, investors could be taking home a 13% gain in the coming year. (To watch Drbul’s track record, click here)

Nike’s recent Q2 2020 earnings report was a strong one too, exhibiting several eye-catching figures. Among the highlights were revenues of $10.3 billion that outstripped the estimate’s $10.1 billion, alongside EPS of $0.71 as opposed to the estimate’s $0.58. The beat lifted the company’s two-year-stacked revenue growth rate to 27%, practically un-heard of for a company the size of Nike.

The strong report has Argus analyst John Staszak in a bullish mode, too. The 5-star analyst points out that Nike’s strong brand and product pipeline have enabled the company to raise prices and increase sales. Staszak also believes the US economy’s “generally solid” conditions and Nike’s robust sales in China are further justification for the high share price. Staszak, therefore, raised his price target from $105 to $115, too. (To watch Staszak’s track record, click here)

Does the Street also think that Nike is a ‘best idea’ for 2020? Apparently so. The sportswear colossus has a Strong Buy consensus rating which breaks down into 19 Buys, 4 Holds and 1 Sell. The average price target of $111.23 indicates further upside of 10%. (See Nike stock analysis on TipRanks)

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