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According to a Wall Street analyst, Nike stock is headed for new highs this year due to its push into the metaverse.
In a December 31 note, Robert Drbul said Nike was his "best idea" for the year 2022.
The brand commands dominant market share, which we expect will grow from here as digital scales further, new product innovation remains robust, and heavy investment behind key growth drivers continues," he wrote.
Nike stock was down 1.8% Monday after gaining 18% in 2021, but Drbul maintained a buy rating and a price target of $195.
The company is the leader in the athletic apparel industry and he raised his earnings per share estimates for the next two years.
Drbul said he's watching Nike's digital strategy and engagement in the metaverse, a digital world where people interact. He asked if the outlook for the year 2022, would include mention of the Metaverse.
Insider reported that Nike is pushing into the future internet, called Web 3.0 and the metaverse. Video games, a metaverse studio, and even a promised line of digital sneakers are all part of its push.
In December, the company announced its acquisition of the influential digital sneaker-maker, which had previously received a $33 million valuation in a funding round.
The metaverse shot into the mainstream in 2021, when the company changed its name from Facebook to Meta. The concept has struggled to land on a single definition, and prominent people, such as Musk, have snubbed the idea altogether.
Many see NFTs as the key to unlocking this digital world where individuals can shop, play video games, build worlds, buy land, and more.
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