Nike (NYSE: NKE) is a timeless footwear, clothing, and sports equipment manufacturer. Founded in 1964, the brand is adored by fans across the globe.
Recently, the stock has been getting a lot of attention for a multitude of reasons. With shares of Nike up just 16% over the past 12 months, is this a good opportunity to buy the athletic apparel leader?
Why is Nike stock up?
Nike shares are on the rise after a recent survey showed that out of 10,000 U.S. teens, Nike was their favorite footwear and apparel brand. This ranking put it ahead of rivals Adidas, which came in at number three, and Lululemon (NASDAQ: LULU) which came in fourth for apparel.
Adding to bullish sentiment is analysts revealing their optimism for these brands, with Under Armour (NYSE: UAA), Nike, and Adidas all given outperform ratings across Wall Street. The footwear favorite is being classed as a long-term structural winner, set to benefit for generations to come. Still, experts have warned investors to expect some short-term volatility as the Oregan-based company, along with many other stocks, is battling market turbulence due to wider economic challenges in the U.S.
Despite Nike being a great long-term play, its share price has suffered due to supply chain constraints caused by the pandemic. One challenge Nike faces is that it relies on Vietnam for production, a region that, like many other countries, is suffering from supply bottlenecks. With around 50% of its shoes made in Vietnam, Nike might face further challenges as we head into the busy holiday season.
However, this is an industry-wide problem. Many expect the company to resolve this short-term issue when supply and manufacturing levels return to normal post-pandemic. Therefore, it should not take away from the future potential of Nike stock for investors looking to wait it out.
Is Nike stock a buy?
Nike is also capitalizing on the tech revolution by building awesome apps. For example, its Nike fitness club and its apps, Nike and SNKRS, have gone down a treat with fitness fanatics. By marketing these apps, it has created a lot of demand for the brand. In addition, by leaning on their partnerships with star athletes, Nike’s marketing is second to none and is known as the go-to brand that consumers buy so they feel like they are wearing the same gear as the pros they look up to.
With strong equity, a loyal fanbase, and programs like the Nike Fitness Club, this stock is a great option for those looking for a popular apparel brand to add to their portfolio.
Apparel stocks are great investments, but if you want a full list of analyst-backed stocks, you should check out MyWallSt’s shortlist. Click here to get free access so you can start your investment journey.
Financial Writer at MyWallSt
Nicole's favorite stock is Etsy because she loves its original and handmade items. She believes people are going to stop buying mass-produced items and start purchasing ‘one of a kind’ fashions and furnishings. In a world of sameness, Etsy has the advantage.