Guggenheim praised Nike for its metaverse strategy, expects it to grow in 2022

An analyst at investment firm Guggenheim called Nike the "best idea" for 2022 due to its focus on the metaverse and virtual goods on NFTs.

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Guggenheim Partners, the global investment and financial services firm, is closely watching the digital development of the Nike sports brand and has called the company its "best idea" for 2022.

The firm's analyst Robert Drbul said in a note to clients that he expects the sportswear brand's dominant share of the market to continue to grow as it continues to scale its products and services and broadens its digital focus.

Nike "is quickly embarking on the next era of its company's history," which it hopes will be "digitally led," Drbul noted in the note published on December 31. The analyst added:

Guggenheim is interested in Nike's digital approach

Drbul called Nike “the leader in the sports apparel industry” and maintained a buy rating and $195 price target on the stock. The claims suggest that Guggenheim anticipates that investing in the company's shares could deliver strong returns this year as the brand's success consolidates around the world.

The brand "presents an opportunity for long-term investors as Nike continues to offer and innovate products that connect with local consumers by promoting healthy lifestyles and other important social issues," he said.

Drbul shared an optimistic view for Nike even though the company has been hit by disruptions to its global supply chain. However, the potential growth outlook for the brand does not seem to hinge so much on its physical items, but on a new wave of digital products that they are developing and expect to launch widely in 2022.

Drbul's optimistic view of Nike appears to tie in largely with the retailer's latest strategy to expand its line of business into the virtual space, which includes non-fungible tokens (NFTs) and the metaverse.

The engagement has generated interest at Guggenheim. In his note, the analyst said the investment firm is closely watching the evolution of Nike's digital strategy and its involvement in the metaverse. “What would be any outlook for 2022 without mentioning the Metaverse?” he commented.

Shares of Nike, which grew about 18% during 2021, soared modestly after Guggenheim's comments. At the time of publication, the price per share has fallen by 1.22% in the last 5 days and is around USD $165.

Potential growth for metaverse in 2022

As DiarioBitcoin reported, during the last quarter, the sportswear retailer was quick to dive into the trend of the metaverse and digital collectibles.

In November, Nike partnered with video game company Roblox to launch its own metaverse called Nikeland, a virtual space where fans of the brand can interact socially, trade NFT items, and even participate in sporting events. Shortly after, the company announced the acquisition of RTFKT Studios, a startup specialized in NFT and other virtual products.

Nike's extensive digital strategy includes video games, tokenized sneakers and other NFT products that can be used by avatars and can be traded in Nike's virtual world.

The concept of the metaverse became widely popular during 2021 after the name change from Facebook to Meta and the plans to expand the giant social network to virtual worlds. Since then, a handful of companies from different fields have begun to explore the sector, anticipating long-term potential, including Nike's main rival, Adidas, which is also developing its virtual world. However, some like the billionaire Elon Musk do not seem convinced of this development.

It should be noted that Guggenheim, which belongs to the well-known family of billionaires of the same last name, has been taking an increasing interest in the digital asset space. Several of the firm's funds have sought exposure to Bitcoin as some of its executives have shared bullish predictions of up to $400,000 for the top long-term cryptocurrency.

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Sources: CNBC, Business Insider, archive

Article by Hannah Estefanía Pérez / DiarioBitcoin

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