Nike surges to all-time high after the company's earnings 'crushed it'

Key Points
  • Nike's latest quarterly earnings topped analysts' expectations.
  • Nike is proving its investments in its direct-to-consumer strategy are paying off.
Shoppers At Niketown Store In San Francisco.
David Paul Morris | Bloomberg | Getty Images

Nike's stock surged to an all-time high Wednesday, on the heels of the company's better-than-expected earnings report.

Shares jumped more than 6% in early trading, hitting a record $92.79. The stock had last hit an intraday high of $90 on April 18. It closed Tuesday, ahead of the earnings report, at $87.18.

Designing new high-tech sneakers and fashion-forward apparel, adding stores and selling fewer products in discount outlets are clearly paying off for Nike.

"The global shift towards more active lifestyles continues to accelerate, and demand for athletic product is high," CEO Mark Parker said during a call with analysts Tuesday evening. "The opportunities ahead are as bright as I've ever seen them." Parker also said the women's line, which grew at a double-digit rate in the latest quarter, will continue to be a "high priority."

On Wednesday morning, two investment firms upgraded their price targets on Nike shares.

Cowen & Co. raised its price target to $103 from $100, citing "the durability of Nike's global growth potential."

"Management's confidence seems as high as we can remember as investments continue to generate record high returns on capital," the firm said in a note to clients.

Jefferies raised its price target to $97 from $80, saying in a note to clients that the company's earnings "crushed it" this quarter. "Nike's business is strengthening in [North America], and we expect the company to continue to recapture the share it has lost to Adidas," Jefferies said.

Wall Street is also noticing Nike's recent slew of acquisitions of tech start-ups, signaling Nike has been thinking outside the box and ahead of many of its peers. In August, CNBC reported that Nike acquired predictive analytics company Celect for an undisclosed amount to be able to better predict what styles of sneakers and apparel customers want, when they want it and where they want to buy it from.

That came after it already acquired consumer data analytics firm Zodiac, in a bid to speed its "digital transformation," and a computer vision company Invertex.

"The digital capabilities that we're creating and investing in are really going to make us a better innovation company — understanding the consumer, serving the consumer, leveraging the innovation that we invest in," Parker said Tuesday. "It's all making us better."

Nike shares have climbed more than 17% this year, giving the company a market cap of about $136.6 billion.

Here's what you need to know about Nike's subscription service
Here's what you need to know about Nike's subscription service