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Nike (NKE) Gains As Market Dips: What You Should Know

Zacks Equity Research

Nike (NKE) closed at $91.51 in the latest trading session, marking a +0.52% move from the prior day. This move outpaced the S&P 500's daily loss of 1.05%. Elsewhere, the Dow lost 1.59%, while the tech-heavy Nasdaq lost 0.54%.

NKE will be looking to display strength as it nears its next earnings release. In that report, analysts expect NKE to post earnings of $0.19 per share. This would mark a year-over-year decline of 69.35%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.43 billion, down 17.21% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.66 per share and revenue of $39.28 billion, which would represent changes of +6.83% and +0.41%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for NKE. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. NKE currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, NKE is holding a Forward P/E ratio of 34.26. Its industry sports an average Forward P/E of 21.42, so we one might conclude that NKE is trading at a premium comparatively.

Investors should also note that NKE has a PEG ratio of 2.8 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Shoes and Retail Apparel industry currently had an average PEG ratio of 1.13 as of yesterday's close.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 241, putting it in the bottom 6% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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