Why Nike Will Continue To Outperform In 2021

As one of the largest and most popular athletic brands in the world, it is of little surprise that Nike, Inc. (NKE - Get Rating) has retained the top spot within its industry in both athletic apparel and footwear for many years. From importing and reselling shoes from the back of a car to leading the industry, NKE has successfully worked its way to the top through constant innovation and strong customer engagement.

In the face of the closure of brick-and-mortar retail stores during the COVID-19 pandemic, NKE has capitalized on the home workout trend very well. Its digital sales surged 84% during its last reported last quarter, with triple-digit growth in North America and strong double-digit increases in EMEA, Greater China and APLA.

The company has masterfully powered up its e-commerce channels with increased consumer engagement. With an increase in demand driven by increased interest in home workouts, the stock seems poised to soar in 2021.

NKE – Sportswear giant Nike (NKE) is poised to outpace its competitors in 2021 due to its core strategy of engaging with consumers directly through a variety of apps. We think the stock should continue gaining in the coming months based on its solid digital sales.

The company’s global brand recognition and unmatched loyalty of its customers have allowed it to gain 40% over the past year. This impressive performance combined with several other factors has helped NKE earn a “Strong Buy” rating in our proprietary rating system.

Here is how our proprietary POWR Ratings system evaluates NKE:

Trade Grade: A

NKE is currently trading above its 50-day and 200-day moving averages of $136.40 and $111.99, respectively, indicating that the stock is in an uptrend. In fact, the stock has gained 10.7% over the past three months reflecting  solid short-term bullishness.

NKE’s revenue has increased 9% year-over-year to $11.24 billion in the fiscal second quarter ended November 30, 2020. This revenue increase is attributable primarily to double-digit growth in direct sales and  growth in Sportswear. Its net income rose 12% from the prior-year quarter to $1.25 billion, while its EPS grew 13% from its  year-ago value to $0.80. Its gross profit increased 7% year-over year to $4.85 billion over this period.

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