Evercore analyst Omar Saad raised the company's price target to $200 from $150, saying it is "becoming one of those rare franchises that almost everyone uses almost every day," and that it's "only just begun" to fully capitalize on this position.
One way it's doing so is by successfully employing a strategy that would make others across the discount-plagued industry envious — raising prices.
"Nike has discovered that is has both absolute pricing power on like-for-like items and relative pricing power as its product mix inexorably shifts toward more premium products," Saad wrote.
At its investor conference last week, Nike management outlined a plan to achieve $50 billion in annual revenue by the end of fiscal year 2020. That compares to $30.6 billion in fiscal 2015.
In addition to capitalizing on pricing power, the company plans to get there by keying into China's rising interest in sports, boosting its online sales and growing its women's business from $5.7 billion annually to $11 billion in five years.
Saad also listed two broader consumer trends that are in Nike's favor: A shift away from "things" toward "experiences" — something the active wear brand plays right into — and what he considers a permanent shift toward healthy lifestyles.
Still, a worsening economy in Europe, a longer-than-expected turnaround in China and gross margin pressure from foreign exchange could prevent Nike from achieving his price target, Saad said.
Nike is also up against a strengthening Under Armour, which expanded its sales by 32 percent, to $3.08 billion, last year. Under Armour is scheduled to report third-quarter earnings on Thursday.
Nike shares are up 38 percent this year, trading above $132 Monday.
Also Monday, BB&T upgraded shares of Nike to "buy" fro "hold," citing its plans to expand the Jordan and Converse brands, as well as opportunities ahead of the Olympics in Rio de Janeiro next year.