Shares of the Beaverton, Oregon-based athletic wear maker rose by as much as 15% to $154.19 apiece, giving the company a $243.6 billion market capitalization.
"The market's main question now is if this is ‘the top’ for Nike? We think the answer is no," wrote UBS analysts Jay Sole and Mauricio Serna, who reiterated their buy rating raised their price target to $185 a share from $170. "We believe the reason to own Nike is for the exceptional growth it is likely to achieve over the coming years."
Nike on Friday upgraded its outlook through fiscal year 2025. The company sees sales growing by up to a low double-digit pace. Earnings per share, meanwhile, are expected to increase at a mid to high teen pace.
Such growth, while strong, would be a slowdown from the current pace.
Nike reported total revenue for its fiscal fourth quarter spiked 96% from a year ago to $12.34 billion. Net income was $1.5 billion.
Sales in North America, Nike’s largest market, soared 141% year over year to a record $5.38 billion. Sales were up 29% on a two-year basis.
The strong performance in North America helped offset slowing sales growth in Greater China. Revenue from the region rose 17% to $1.93 billion, below the $2.25 billion that analysts were expecting.
China has, until recently, been the driving force of the company’s rebound from the damage caused by the pandemic.
The UBS analysts say slowing sales growth in China is unlikely to get worse, pointing to comments from Nike CFO Matt Friend, who noted gradual month-over-month improvement.
"Nike is a long-term outperformer in our view," UBS’ Sole and Serna wrote.
Nike shares were down 5.56% this year through Thursday, lagging the S&P 500’s 14% gain.