NBA games during the upcoming season could be further restricted in China, but Cowen said it's is skeptical it will materially affect Nike Inc (NYSE: NKE)'s most profitable region.
John Kernan reiterated an Outperform rating on Nike with a $105 price target.
It's doutbtful the turmoil between China and the NBA will derail Nike's tremendous growth in the region, as he brand's “strength in the region is substantial,” the analyst said in a note. (See his track record here.)
"Nike has experienced ‘double-digit growth every quarter for more than five years’ in Greater China, ‘works closely’ with China’s Ministry of Sport and Education as Chinese consumers are encouraged to adopt more active lifestyle and the company has been growing its digital presence on Tmall and WeChat while opening its first House Of Innovation in Shanghai in 2018."
At Nike’s Investor Day in 2017, the company set a low-to-mid-teens revenue growth target for Greater China and has exceeded this target every year since, he said.
Greater China represents 17% of total Nike brand revenue, and Kernan expects the region to comprise 24% of total Nike brand revenue by 2024.
Powell: Endorsements Matter In China
NPD Group analyst Matt Powell predicts that the fallout between the NBA and China could lead consumers to ditch western footwear companies for local brands, but contends that basketball shoe sales in China have been robust.
“From what I’m seeing, endorsed NBA players still drive sales in China, while they do not in the U.S.,” Powell said in a Thursday blog post.
Nike shares were up 0.95% Friday, closing at $93.88.
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Photo by Wpcpey via Wikimedia.
Latest Ratings for NKE
|Oct 2019||Initiates Coverage On||Underperform|
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