Back to top

Image: Bigstock

Evaluating Nike Stock Ahead of Q1 FY21 Earnings

Read MoreHide Full Article

 

 

On today’s episode of Full Court Finance at Zacks, Ben Rains dives into Nike (NKE - Free Report) ahead of its first quarter fiscal 2021 financial release that’s due out after the closing bell on Tuesday, September 22. The sportswear giant has outperformed the market in 2020 and Wall Street appears happy about its e-commerce future.

Stocks fell on Monday to push the market’s pullback into a fourth straight week. The tech-heavy Nasdaq now sits about 12% off its early September record. Analysts and traders appear to be growing more nervous about the lack of progress on the stimulus front, while the uncertainty of the upcoming election might create more near-term volatility.

That said, the earnings outlook continues to improve. And the economy has bounced back despite the coronavirus impact, even if things have cooled off. On top of that, Wall Street still must hunt for returns with interest rates pinned near zero, possibly through 2023. Let’s also not forget that the S&P 500 is still in the green in 2020 and remains up over 45% off its late March lows.

With this in mind, the broader third-quarter earnings season will hopefully provide a better understanding of what’s next. And Nike is one of the first of a few big names set to report what we at Zacks consider to be part of the broader Q3 earnings season, with such results already out from FedEx (FDX - Free Report) , Adobe and a few others.

Nike was benefiting from its transition to a higher-margin direct-to-consumer model well before the coronavirus. NKE's e-commerce and DTC expansion came as it watched malls and department stores fade in the Amazon (AMZN - Free Report) age.

Despite the success of Lululemon (LULU - Free Report) and the resurgence of Adidas (ADDYY - Free Report) in North America, Nike is perhaps more influential in sports and fashion than ever.

Nike remains one of the world’s most valuable brands, alongside Coca-Cola (KO - Free Report) , McDonald’s (MCD - Free Report) , Disney (DIS - Free Report) , Apple (AAPL - Free Report) , and others. And that’s just part of the reason why NKE might be appealing to investors.

Zacks’ Single Best Pick to Double

From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.

The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.

Click Here, See It Free >>

Published in