Nike Inc NKE 0.89% shares have lagged the market in the past year, but have caught fire of late. The stock is up 13.7 percent in the past month, and Morgan Stanley analyst Jay Sole recently said the athletic apparel giant has put its problems in the past. Morgan Stanley has upgraded the stock from Equal Weight to Overweight and raised its price target for Nike to $68.
In a new research note, Sole spelled out his bullish case for Nike and said the company is currently at the bottom of a cycle that will be back in the upswing in the near future.
Slumping sales have been one of the major factors weighing down Nike’s stock over the past year, but Sole said North American sales growth rates should reaccelerate to 5 percent by the middle of fiscal 2018 driven by new products such as Air VaporMax. In fact, Morgan Stanley projects that VaporMax could become Nike’s next $1 billion product.
Despite the recent hiccups, Sole said Nike’s long-term future and growth prospects are bright.
“The market does not appreciate Nike’s ability to return to solid +L-MSD North America sales growth or drive long-term EBIT margin expansion,” Sole wrote.
Morgan Stanley is predicting…
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