Nike shares gain for a third straight session on Tuesday, Cowen upgrades stock to “Outperform”, raises price target

Shares of Nike Inc (NKE) registered an intraday high unseen in 15 weeks on Tuesday, after Cowen raised its rating on the stock from “Market Perform” to “Outperform”, as product innovation is expected to continue bolstering the athletic footwear and apparel manufacturers margin. The investment banking firm also revised up its price target on the stock from $80 to $90.

Nike shares closed higher for a third consecutive trading session in New York on Tuesday. The stock went up 0.37% ($0.30) to $80.75, after touching an intraday high at $81.31, or a price level not seen since October 9th ($81.49).

Shares of Nike Inc have risen 8.92% so far in 2019 compared with a 5.03% gain for the benchmark index, S&P 500 (SPX).

In 2018, Nike Inc’s stock surged 18.53%, thus, it again outperformed the S&P 500, which registered a 6.24% loss.

“Prospects remain solid for continued higher full price sell through and average selling price lift, which could drive gross margin above expectations,” Cowen analyst John Kernan wrote in a client note, cited by CNBC.

“We view Nike gross margin and the concept of Speed as key catalysts to near-term and multiyear upside to gross margin and the companys path to $5 in earnings per share and potentially $6 billion in free cash flow,” Kernan noted.

According to Cowen, Nikes shareholders could see $24 billion in returns over the upcoming five years through dividends and share repurchases, in case the company continues to maintain a free cash flow of $4.5 billion annually between fiscal years 2019 and 2023.

According to CNN Money, the 32 analysts, offering 12-month forecasts regarding Nike Incs stock price, have a median target of $87.50, with a high estimate of $103.00 and a low estimate of $55.00. The median estimate represents an 8.36% upside compared to the closing price of $80.75 on January 22nd.

The same media also reported that 20 out of 34 surveyed investment analysts had rated Nike Incs stock as “Buy”, while 10 – as “Hold”.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Nike Inc (NKE) are presented as follows:

Central Pivot Point – $78.96
R1 – $82.46
R2 – $84.47
R3 – $87.97
R4 – $91.47

S1 – $76.95
S2 – $73.45
S3 – $71.44
S4 – $69.43