NIKE Buys RTFKT for Undisclosed Amount; Street Says Buy

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Sportswear and apparel major NIKE, Inc. (NKE) recently announced that it has acquired RTFKT, a company that engages in innovation to deliver next-generation collectibles that merge culture and gaming. The terms of the deal have been kept under wraps.

Following the news, shares of the company declined marginally to close at $166.80 in the extended trading session on Monday.

Strategic Impact

With the Non-Fungible Token (NFT) space gaining prominence by the day, the buyout is expected to position Nike as a key player in the same.

The acquisition will allow Nike to gain access to RTFKT’s innovative solutions in the game engines, NFTs, blockchain authentication and augmented reality areas.

Management Commentary

The CEO of Nike, John Donahoe, said, “This acquisition is another step that accelerates Nike’s digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming and culture. Our plan is to invest in the RTFKT brand, serve and grow their innovative and creative community and extend Nike’s digital footprint and capabilities.”

Price Target

On December 13, Morgan Stanley analyst Kimberly Greenberger reiterated a Buy rating on the stock with a price target of $206, which implies upside potential of 23.5% from current levels.

Consensus among analysts is a Strong Buy based on 17 Buys and 3 Holds. The average Nike stock forecast of $181.79 implies upside potential of 9% from current levels. Shares have gained about 22.4% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings, the world’s biggest website usage monitoring service, offers insight into Nike’s performance this quarter.

According to the tool, the Nike website recorded a 24.02% monthly decline in global visits in November, compared to the same period last year. Further, year-to-date, Nike website traffic has declined 6.03%, compared to the previous year.

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