Raymond James made Nike its “top pick” in the consumer sector because of its recent plans to sell directly to consumers through the social media and e-commerce. The firm initiates coverage on the sportswear company’s shares with an outperforming rating.
Nike released its fourth-quarter earnings and sales to be above Wall Street’s expectations last week. The Company also affirmed a new deal with Amazon, on its earnings call, where it is contracted to various but limited amount of products on the internet giant’s e-commerce website. The firm also said it will start selling their products directly to consumer through Instagram, which is owned by Facebook.
Analyst Cedric Lecasble wrote in a note to clients Thursday. "Nike's approach to social media and e-commerce has radically evolved for the better recently, in our view … Leading brands' online growth will outpace retailers' as they develop customization capabilities (Nike and Adidas lead the game) and improve their collaboration with Amazon."
The Analyst pointed out how Nike has the largest number of followers on the said social media platform compared to its other competitors. He even added that the firm’s social media interactions with customers are more than four times higher than Adidas.
Lecasble also noted how Nike has more than 90 percent market share of their basketball shoes market with almost 75 percent of the NBA players are sponsored by the company.
Nike Shares are up by 13 percent this year with the S&P 500’s 8.7 percent returns.