Should I buy Nike shares after UBS raised its price target to $183?

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Mar 28, 2021
  • UBS raised its price target to $183 on Nike
  • RBC assigned a price target to $165 on Nike
  • If the price jumps above $150 resistance, the next target could be around $160

Nike (NYSE: NKE) shares continue to trade in a bull market after the company reported Q3 earnings results this March. Even with the COVID-19 pandemic, the sale of the company’s products is going well, and Wall Street remains bullish on Nike as it sees it well-positioned for success in 2021.

Fundamental analysis: UBS raised its price target to $183 on Nike

Nike reported Q3 results this March; total revenue has increased by 2.6% Y/Y to $10.36B while Q3 GAAP EPS was $0.90 (beats by $0.14). Total revenue has increased below expectations (missed by $610M), but a gross margin increased 130 basis points to 45.6% in the third quarter.

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“Our teams have proven their agility to operate through uncertainty while also staying focused on the long term, and we once again demonstrated that agility in Q3. Throughout the pandemic, we have stayed focused on our unique advantages, and we’ve been resolute in fueling innovation, and our brand is as strong as ever,” said John Donahoe, President and Chief Executive Officer of Nike.

The company’s business has proven resilient throughout the pandemic, and Wall Street remains bullish on Nike as it sees it well-positioned for success in 2021. UBS raised its price target to $183 on Nike after the Q3 earnings report, supported by expectations that the company will continue to generate strong growth in the upcoming months.

Morgan Stanley reported that Nike delivered a “high quality” beat, while RBC’s Kate Fitzsimons assigned a price target to $165 on Nike. Nike’s size and scale represent structural competitive advantages, and analysts agree that any Nike shares’ pullback represents a buying opportunity.

Nike shares could advance above the $150 resistance level in April; still, if the U.S. stock market enters a more significant correction phase, the share price could be at much lower levels.

Technical analysis: $150 represents the strong resistance level

Wall Street remains “bullish” on Nike as it sees it well-positioned for success in 2021 and the company’s shares continue to trade in a buy zone.

Data source: tradingview.com

Nike shares have weakened from their recent highs above $146 registered in the third week of March, and the current price stands around $132. The critical support levels are $130 and $120; $140, $150, and $160 represent the important resistance levels.

If the price jumps above $150, it would be a signal to trade Nike shares, and the next target could be around $160, but if the price falls below the $120 support level, it would be a firm “sell” signal.

Summary

Nike shares continue to trade in a bull market, and it is important to say that UBS raised its price target after the Q3 earnings report. The company’s business has proven resilient throughout the pandemic, and analysts agree that any pullback in Nike shares represents a buying opportunity. If the price jumps above $150, the next target could be around $160, but if the price falls below the $120 support level, it would be a firm “sell” signal.

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