Nike is Named the Best Idea for 2022 According to Guggenheim

Athletic shoe and apparel company Nike has been named the best for 2022 this week by a Guggenheim analysts.

According to Guggenheim’s Robert Drbul, who wrote a note to clients, the retailer’s already dominant market share should continue to grow as it keeps scaling online and innovates with new footwear and apparel products in the new year.

Near term, Nike has been hurt by global supply chain disruptions, he said, but the company should still be able to hit the financial targets it laid out last June.

The analyst also said it will be watching Nike’s engagement in the metaverse closely in 2022. Nike had bought virtual sneaker company RTFKT for an undisclosed amount in December.
The company additionally teamed up with Roblox to create a virtual world called Nikeland.

While Nike has seen slow momentum for its brand in China, Drbul said, however, that any concern regarding China “presents an opportunity for long-term investors as Nike continues to deliver and innovate products that connect with local consumers by promoting healthy lifestyle and other important societal themes.”

“The brand commands dominant market share, which we expect will grow materially from here as digital scales further, new product innovation remains robust, and heavy investment behind key growth drivers continues,” the analyst wrote.

Drbul maintained a buy rating and a price target of $195 on Nike stock. He believes Nike is “the leader in the athletic apparel industry,” and raised his earnings per share estimates for 2023 to $4.85 from $4.50 and for 2024 to $5.70 from $5.27.

Shares of Nike were up almost 18% in 2021.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.