Nike Stock Will Sustain Momentum Amid Digital Expansion
Nike stock price has recently hit an all-time high of $136 due to stronger than expected results for the third quarter. The company says strong digital sales growth helped in offsetting lower physical traffic on coronavirus concerns.
Shares of the sports products seller soared almost 26% since the beginning of this year, accelerating the twelve months gains to 40%. The market analysts believe Nike stock price has the potential to sustain the gains as its digital sales are growing at a better than expected pace.
Digital sales are supporting gains
Although its revenue of $10.6 billion fell 0.6% year over year amid lower physical traffic at retail stores, the digital sales growth of 82% from the past year period helped in offsetting the negative impact of coronavirus.
Digital sales grew at a high double-digit rate across North America, APLA, and Greater China. The company experienced triple-digit growth in EMEA.
“NIKE is recovering faster based on accelerating brand momentum and digital growth, as well as our relentless focus on normalizing marketplace supply and demand,” said Matt Friend, Executive Vice President, and Chief Financial Officer, NIKE, Inc.
“We continue to drive investment in capabilities that will fuel our consumer-led digital transformation, catalyzing long-term growth and profitability for NIKE,”
Matt Friend added.
Analysts see more gains for Nike stock
Market analysts have appreciated digital growth and product innovation strategy.
UBS analyst Jay Sole has provided a price target of $152 as the analyst believes shares would expand the momentum. He believes the company is set to maintain high single-digit sales growth, thanks to its product innovation, and eCommerce and, supply chain.
BTIG analyst Camilo Lyon has also expressed similar sentiments.
The analyst says digital sales are now accounting for 30% of overall revenue, which is also a big catalyst for earnings growth.
Digital sales are less costly for Nike when compared to selling in retail stores. That’s why Nike has topped consensus earnings per share by $0.47 in the latest quarter.