Investment banks are optimistic about Nike's meta-universe strategy: towards the "next era" of digital commerce Stock prices are expected to reach new highs

Wall Street analysts expect Nike's stock price to hit a new high this year, in part because of its strategy to enter the meta-universe.

In a December 31 report released by Wall Street investment bank Guggenheim, analyst Robert Drbul listed Nike as its "preferred stock" for 2022, saying the sportswear retailer "is rapidly opening the next era in the company's history." He expects the era to be "led by numbers."

"Nike's market share is already dominant, and we expect the brand's market share to continue to grow significantly as digitalization expands, new product innovation remains strong, and the huge investment behind key growth drivers remains." He wrote.

Debouler maintains a "buy" rating on Nike stock and a $195 price target, more than 18 percent above current levels. The stock rose 18 percent in 2021 and fell 1.2 percent on Monday.

Debrerk said the company is a "leader in the sportswear industry" and raised its 2023 earnings per share outlook for Nike to $4.85 from $4.5 and its 2024 earnings per share forecast from $5.27 to $5.7.

He said that although Nike has been affected by the recent disruption of global supply chains, the company should still be able to meet the financial targets set last June.

Digital strategy is the focus

Debre also said he is closely monitoring Nike's evolving digital strategy and its engagement with the metaverse.

Nike has been advancing the future of the Internet, namely Web 3.0 and the metaverse. Its efforts include making video games, creating metaversic studios, and even promising a line of digital sneakers called CryptoKicks.

Last December, Nike announced its undisclosed acquisition of virtual sneaker company RTFKT, which was founded in 2020 to produce digital products such as sneakers and use blockchain technology to ensure authenticity.

Nike has also partnered with video game platform Roblox to create a virtual world called Nikeland. The company sees its entry into the metacosm as a way to reach younger consumers and hopes to translate those connections in virtual environments into actual sales.