Expecting 15% Upside for Nike in This Beijing 2008 Story

What better way to start 2008 than to find great book and talk about the coolest brand for sneakers? Nike's (NKE) industry leadership is clear. The firm reported better than expected fiscal 2Q08 results with EPS of $0.71, up 11% vs last year. It also has a significant exposure to non-US revenue (53% of total). In the U.S, Nike continues to gain market share despite a tough environment. The rise of own retail stores as planned, will enable domestic revenue growth to outpace orders. (up 1%). According to a spokesman from Adidas, another company planning solo retail shops:

Retail consolidation is happening at a lightening pace. Our own retail is a direct touch point and marketing statement to consumers. It allows us to showcase our brand and gives us a high level of brand control.

Nike was also named "coolest brand" in a survey of 12- to 19-year-olds conducted by Teen Research. Goldman's price target has been placed at $73 based on a risk/reward and DCF analysis. They see 14% upside.

My take: Wait our for the price to cross $67 before you commit to a buy. I am looking for NKE to give us 15% in 2008; most of it coming from boost in media attention around the Summer Olympics, Beijing 2008.

Risks: A slowdown in US revenue growth, input cost increases, increased SG&A expenses.

Disclosure: I do not own NKE