The aftermath of Nike's controversial Colin Kaepernick ad could show up in quarterly results next week — in a very good way.
Canaccord Genuity is predicting a sales boost from the polarizing ad that features the former NFL quarterback. Despite some pushback from vocal consumers, the firm found in its recent survey that most consumers "overwhelmingly" support it.
"We can comfortably conclude that the ad has had the intended effect of positively skewing NKE's brand perception and likely providing a bump in sales," Canaccord Genuity analyst Camilo Lyon wrote in a note to clients Tuesday.
Canaccord asked more than 1,000 people, without any demographic constraints, what they thought of the company's "Just Do It" ad centered around the former San Francisco 49ers player. More than half of respondents were fans of it. The survey results support the firm's own view that the overall impact of the ad is positive, and it expects Nike to "confirm our assessment when it reports FQ1 results next week."
When asked "What do you think of Nike's ad with Colin Kaepernick?" 51 percent of respondents said they "support it," more than twice that percentage of respondents who said they "don't support it." Thirty-one percent of survey respondents said they would absolutely buy more Nike after seeing the ad, while 14 percent said they would purchase less of it.
Shares of the company plunged after it released its new ad campaign but have recovered since, up almost 1 percent Tuesday and 5 percent in the past 30 days back to a record high.
Its online sales surged in the days after the advertisement debuted. Between that Sunday and Wednesday following the announcement, product orders rose 27 percent, according to Edison Trends, a digital-commerce researcher. In the same period last year, they dropped by 2 percent.
Calls for Nike to drop its sponsorship of Kaepernick, who signed with the brand in 2011, started after he protested during the national anthem for the 2016 season. He and others kneeled during "The Star Spangled Banner" to protest police brutality against African-Americans.
Canaccord reiterated its "buy" rating with a $95 price target, about 14 percent above where the stock was trading Tuesday. The firm is expecting Nike's quarterly results released next week to "confirm its assessment."
Other firms have also been bullish in the aftermath of Nike's ad. Piper Jaffray still has an overweight rating on the stock and called the controversy "good publicity." Wedbush Securities has a $90 price target and said the move shows Nike "knows its American consumer well."