By Senad Karaahmetovic
Stifel analysts see an attractive entry point in Nike (NYSE:NKE) shares and believe the stock could eventually double in 2-3 years.
With Nike shares trading sharply lower in 2022, including a 14% drop in September, the analysts noted that main investor concerns remain excess inventory levels and FX headwinds caused by the strong dollar. However, this type of market environment also offers a “tactical opportunity for long-term investors to accumulate shares in a category-defining quality growth company.”
“Demand remains strong validating brand relevance and headwinds to margin should reverse in FY23+ as pressures from inventory clearance and freight costs subside,” they told clients in a note.
The analysts remind investors that Nike valuations are at the lowest level in two and a half years. As such, they sees the capacity for Nike stock to “double in two years based on reasonable growth assumptions and a 5-yr. median valuation multiple.”
In the meantime, they reiterated the $110 per share price target on Buy-rated Nike shares.
Nike share price closed at $90.17 yesterday.