5 Best Clothing Stocks To Buy Now

1. NIKE, Inc. (NYSE:NKE)

Number of Hedge Fund Holders: 72

NIKE, Inc. (NYSE:NKE) is a Beaverton, Oregon-based apparel, accessories, equipment, and footwear retailer. The company operates in the activewear, lifestyle, and sportswear category.

Piral Dadhania at RBC Capital initiated coverage on NIKE, Inc. (NYSE:NKE) stock with an Overweight rating and a target price of $125 in a research note issued on September 22. The analyst termed NIKE, Inc. (NYSE:NKE) stock as a 100-pound gorilla in the sportswear category with a dominant market leader position, leading product franchises, and an online platform that is aimed to drive growth in the future. Dadhania sees the recovery in the Chinese market as driving an increase in investor confidence and expects the trend to continue in the future also. The analyst thinks that NIKE, Inc. (NYSE:NKE) aims to remain one step ahead of its competitors. The company’s strong growth plans merit its inclusion in our list of the 10 best clothing stocks to buy now.

Here’s what RiverPark Funds said about NIKE, Inc. (NYSE:NKE) in its Q2 2022 investor letter:

“NIKE, Inc. (NYSE:NKE), also a previous holding, is, by far, the leading athletic footwear, apparel, and equipment company in the world with over $46 billion in revenue, $6 billion in 2021 annual free cash flow, and over $4 billion of excess cash. We expect the company to return to at least 10% annual revenue growth over the next few quarters, in line with management guidance. Moreover, we believe that NKE should continue its accelerating profit growth, as we expect margins to increase materially through rising average sales prices (from both increased pricing and a mix shift to more premium products), the company’s deep innovation pipeline, a secular shift from the company’s traditional wholesale channels to a more direct-to-consumer approach (now 35% of revenues up from 16% ten years ago), and a more streamlined supply chain. We believe that the continued global secular growth trend towards active wear will continue to aid Nike’s topline growth, while we expect the combined gross and operating margin improvements from its initiatives will drive long-term mid-teens or higher annual EPS growth for the foreseeable future. We took advantage of the selloff over the past few months to reinitiate a small position in NKE at a multi-year low in its valuation.”

You can also take a peek at 12 Best Medical Device Stocks To Buy and 15 Biggest Energy Companies in the US.

Follow Insider Monkey on Twitter