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How Nike Could Zoom to $48 Billion In Sales Within 5 Years

Nike's triple-double threat could send the stock soaring.

Nike's (NKE - Get Report) "Triple Double Strategy," the athletic apparel retailer's plan for 2X Innovation, 2X Speed and 2X Direct laid out at its investor day, has given analysts at Macquarie confidence in the future of the swoosh.

The firm currently has a 12-month price target on Nike of $71 per share, and reiterated its 'Outperform' rating on its stock, predicated on the initiatives.

Regarding twice the innovation, Nike's new product launches of its VaporMax, ZoomX, React, and the anticipated launches of AirMax 270, Shox, Epic React and EARL highlights the innovative power and potential from the third largest U.S. design patent holder, the firm noted.

Nike's efforts in digital, illustrated by its 2X Direct strategy "should represent ~15% of FY18E revenues (7% + 8% Digital wholesale) and should grow to 30% over the next five years," Macquarie noted. "Digital will reach $14.5B if we assume Nike revenues will reach $48B in 2022E driven by a high-single-digit [compound annual growth rate].

Nike's 2X Speed strategy concerns the retailer's "Manufacturing Revolution," which makes its supply chain much more efficient, as Nike scales production through various strategic partnerships in the Americas, Macquarie noted.

Additionally, "Nike guided for EPS growth at a mid-teen rate. This, suggests to us Nike will [also] accelerate its share repurchase program over the next five years." the firm contended.

Shares of Nike were moving lower over 1.7% in afternoon trading on Monday.

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