Guggenheim names Nike its best idea in 2022, citing metaverse play

A customer shops at the Nike store on December 21, 2021 in Miami Beach, Florida.

Joe Raedle | Getty Images

Guggenheim on Monday named Nike its “best idea” for 2022.

Analyst Robert Drbul said in a note to clients that 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 reach the financial targets it laid out last June.

Nike has also seen momentum slow for its brand in China, which was a key point of weakness in the company’s latest earnings report.

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.”

Guggenheim also said it will be closely watching Nike’s engagement in the metaverse in 2022. In December, the retailer announced it bought virtual sneaker company RTFKT for an undisclosed amount.

Nike has also teamed up with Roblox to create a virtual world called Nikeland. Companies see entering the metaverse as a way to reach younger consumers and hopefully translate those connections in a virtual setting into real sales.

Shares of Nike were down more than 1% in early trading Monday. The stock was up almost 18% in 2021. Its market value is over $260 billion.

Source: https://www.cnbc.com/2022/01/03/guggenheim-names-nike-its-best-idea-in-2022-citing-metaverse-play.html