Stephanie Link’s bull case for Nike stock

Nike Inc (NYSE: NKE) has done incredibly well in recent months but the stock is still trading at a bit of a discount, says Stephanie Link. She’s the Chief Investment Strategist at Hightower Advisors.

Nike’s DTC push will help boost margins

Link is particularly bullish on the multinational’s direct-to-consumer business that she’s convinced will continue to help improve margins in the coming quarters. On CNBC’s “Squawk Box”, she said:

The real story is DTC. It’s about 27% of total revenues. As they transition to DTC, this means you’ll see better margins. That’s we got last quarter and that’s what I think the story is for the next year or two.

Nike is scheduled to report its Q3 results next month. Consensus is for it to earn 50 cents a share this quarter versus 87 cents per share a year ago.

For the year, Nike stock is up more than 5.0% at writing.

Nike will benefit from China reopening

Moving forward, Nike Inc could see a boost to its financial performance now that China is pulling out of its stringent COVID restrictions. That will also translate to a higher stock price, Link added.

It’s the industry behemoth. They have a very strong pipeline. And if you think that China is going to reopen and it’s going to be sustainable, they have about 15% of their total revenues in China.

Earlier this week, Incline Global Management LLC confirmed that it increased its position in Nike by 92.9% in the third quarter.

Link’s constructive view is in line with Wall Street that also currently rates Nike stock at “overweight”.

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