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The Ratings Game: Nike nearly doubled its revenue year-over-year and says there’s even more growth to come


Nike Inc. reported fiscal fourth-quarter revenue that rose 96% to $12.3 billion and says digital business has doubled over the past two years to more than $9 billion, but forecasts even more growth to come.

The global athletic giant blew past Street expectations, sending shares up nearly 14% in Friday trading and putting the stock in record territory.


stock has gained 8.6% for the year to date while the Dow Jones Industrial Average

is up 12.6% for the period.

See: Dow trades about 1% off record, as Nike’s stock surges

“The structural tailwinds we’ve discussed before, including the return to sport and permanent shifts in consumer behavior toward digital and health and wellness continue to create energy for us,” said John Donahoe, Nike’s chief executive, on the earnings call, according to FactSet.

“And we remain focused on our largest growth drivers, including our women’s business, apparel, Jordan and international.”

Nike says it’s attracting new Gen Z customers with its latest TikTok and Snapchat campaigns, along with the new Jordan brand Zion 1, the first signature shoe from NBA star Zion Williamson.

Nike members now total 300 million, which creates what Donahoe calls a “consumer funnel” that drives engagement, average order value (AOV), and purchase frequency.

And the women’s business was up 22% for the full-year, growth that Donahoe called “outsized.”

Also: Adidas launches period-proof tights as athletic companies turn their attention to women

“The market’s main question now is if this is ‘the top’ for Nike? We think the answer is no,” wrote UBS analysts in a note.

“The financial benefits from Nike’s transformation into a digitally-led, direct-to-consumer company are just starting to play out. We believe the reason to own Nike is for the exceptional growth it is likely to achieve over the coming years.”

UBS rates Nike stock buy with a $185 price target, up from $170.

“Key here has been membership, with strength from members evident across engagement, AOV and buying frequency,” wrote Credit Suisse.

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“Given that buying member growth is outpacing new member growth, those that interact with Nike are becoming increasingly entrenched.”

Credit Suisse rates Nike stock outperform with a $183 price target, up from $165.

“With the athletic category having long-duration global secular and structural tailwinds, we see Nike as uniquely positioned to execute to a more direct model,” wrote Stifel analysts in a note.

“We expect this translates to growth, margin improvement, and strengthening ROIC longer-term.”

Stifel rates Nike stock buy with a $213 price target, up from $168.

Other analyst groups that raised their price targets include Baird (to $192 from $150, stock rated outperform) and Cowen (to $181 from $145, stock rated outperform).

The Wall Street Journal: China’s Didi seeks to raise nearly $4 billion in IPO

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