Nike's controversial ad campaign with former San Francisco 49ers quarterback Colin Kaepernick has drawn a surge in Instagram followers and likes on Twitter and Facebook, which should translate into higher sales, according to one analyst.
Nike added roughly 170,000 Instagram followers around the timing of the release of its ad campaign, Wedbush Securities analyst Christopher Svezia said in a research note Friday.
"Indeed, [Nike] management knows its American consumer well and the campaign featuring Mr. Kaepernick is a positive for the brand and likely its sales," Svezia said. The company's shares hit a record high of $83.90 on Thursday. Wedbush placed a 12-month price target of $90 a share on the stock.
The ad campaign generated "possibly record likes by Americans" on social media, even though there's been a wave of anti-Nike comments as well, according to Webush's internal analysis of the marketing campaign. Kaepernick, who knelt during the 2016 National Football League season during the national anthem in protest against racial injustice, opted out of his contract with the 49ers and hasn't signed with another NFL football team.
Though the campaign prompted a boycott from some consumers who were upset over the use of a polarizing figure like Kaepernick, and the stock initially dropped, Nike's online sales reportedly surged in the immediate few days thereafter. The video on Nike's Instagram account is now its second most-liked post ever, behind its soccer World Cup campaign, Wedbush found.
Overall mentions of Nike across numerous social media channels like Twitter and Facebook soared, with many celebrities and big-name athletes chiming in, many in favor of the ad.
The response to Nike's ad should be a big positive for the company, which competes for shoppers with the likes of Adidas, Under Armour and Lululemon, Svezia said. Nike shares have since rebounded from an initial fall when the campaign was announced and hit an all-time high of $83.90 on Thursday of this week.
Wedbush reiterated its outperform rating on Nike's stock, with a price target of $90. Shares were up less than 1 percent Friday morning at $83.45. The stock has rallied more than 33 percent so far this year, bringing Nike's market cap to more than $133 billion.
Correction: Colin Kaepernick knelt during the 2016 National Football League season during the national anthem. An earlier version misstated the year.