Nike upgraded on ‘lean’ inventory, direct-to-consumer shift

Nike Inc. NKE, +3.18% was upgraded to overweight from neutral at Piper Jaffray on a number of factors including the company’s "lean" inventory, its shift to direct-to-consumer sales, its product pipeline and expansion in China. Piper Jaffray raised its price target to $93 from $72. Analysts led by Erinn Murphy think the athletic category is an "extremely healthy" one with North America tracking for acceleration thanks to inventory improvements. "Consumer shift to digital commerce is a significant tailwind for athletic brands given low Amazon risk and the accelerating increase in revenue per unit it is driving," analysts wrote. Analysts think both Nike and Adidas AG ADS, +1.21% can be winners, with both contributing equally to category growth and the shift to digital keeping Inc. AMZN, -0.19% at bay. Susquehanna Financial Group also upgraded Nike on Monday. Nike shares are up 3% in Monday trading, and 31.3% for the year to date. The S&P 500 index SPX, +0.25% has gained nearly 7% for the period.

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