Here's Why Nike Is A 'Slam-Dunk' Over Its Largest Competitors

Nike Inc NKE is the slam-dunk winner in a head-to-head match-up with its three largest competitors, an analyst said Wednesday.

Nike has been winning market share from Adidas AG ADDYY, while Under Armour Inc UA has a lesser global reach, Citi's Kate McShane said in a note well-supplied with sports metaphors.

Growth in the athletic apparel category is likely to benefit all three companies during the next several years.

But Nike "has emerged as the global leader," according to McShane, who cited its market share gains, sales growth and potential for improved margins.

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The analyst also cited Nike's dividends and share buybacks for what she believes is a potential 18 percent gain in Nike's future stock price. McShane maintains a Buy rating on Nike.

Adidas share price, meanwhile, could drop slightly in the wake of its plan to reignite growth in North America, according to Citi's Richard Edwards, who maintained a Neutral rating on Adidas.

Nike said last week it aims to grow earnings by 15 percent annually through 2020, while increasing sales at a high single-digit rate.

Despite significant growth potential for Under Armour, McShane said the spending required to capture that growth will keep its margins comparatively narrow for several years, and limit its stock price gains to about 10 percent.

McShane, who believes Under Armour will boost its guidance when it posts earnings April 28, maintained a Buy rating on the company.