UK Markets open in 5 hrs 24 mins

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

  • Oops!
    Something went wrong.
    Please try again later.
·3-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Nike (NKE) closed the most recent trading day at $142.95, moving +0.15% from the previous trading session. This move outpaced the S&P 500's daily loss of 1.89%. At the same time, the Dow lost 1.3%, and the tech-heavy Nasdaq lost 0.17%.

Heading into today, shares of the athletic apparel maker had lost 13.85% over the past month, lagging the Consumer Discretionary sector's loss of 3.32% and the S&P 500's loss of 1.79% in that time.

Investors will be hoping for strength from Nike as it approaches its next earnings release. In that report, analysts expect Nike to post earnings of $0.72 per share. This would mark a year-over-year decline of 20%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.61 billion, up 2.43% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.69 per share and revenue of $47.13 billion, which would represent changes of +3.65% and +5.83%, respectively, from the prior year.

Any recent changes to analyst estimates for Nike should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has moved 0.43% higher. Nike currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Nike has a Forward P/E ratio of 38.66 right now. This valuation marks a premium compared to its industry's average Forward P/E of 14.

It is also worth noting that NKE currently has a PEG ratio of 2.65. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Shoes and Retail Apparel was holding an average PEG ratio of 0.92 at yesterday's closing price.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 25, which puts it in the top 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
NIKE, Inc. (NKE) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting