KeyBanc Bullish On Nike's E-Commerce Opportunity

Nike Inc NKE is a growth company that has performed well during the pandemic with its shift to digital and a move away from undifferentiated products, according to KeyBanc Capital Markets.

The Nike Analyst: Matthew DeGulis initiated coverage of Nike with an Overweight rating and %174 price target.

The Nike Thesis: The company’s gradual shift away from undifferentiated products toward direct-to-consumer has been “supercharged through the pandemic,” DeGulis said in an initiation note.

“Nike has added millions of new consumers to its databases over the past few months, allowing Nike to shift its marketing strategy from adding new customers to driving purchases among existing customers, which is much more efficient in terms of marketing spend,” the analyst said. 

“We think Nike’s digital infrastructure and read and react model are unmatched in softlines, which should help the company continue to pick up share in footwear, and expand its presence in apparel.”

KeyBanc expects Nike to generate margin expansion for years to come, driven by e-commerce growth.

NKE Price Action: Shares of Nike were down 0.52% at $136.83 at last check Friday. 

Photo courtesy of Nike.