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Nike (NKE) Stock Drops Despite Market Gains: Important Facts to Note

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Nike (NKE - Free Report) closed at $91.77 in the latest trading session, marking a -0.44% move from the prior day. This change lagged the S&P 500's 0.09% gain on the day. Meanwhile, the Dow experienced a drop of 0.49%, and the technology-dominated Nasdaq saw an increase of 0.65%.

Coming into today, shares of the athletic apparel maker had lost 2.49% in the past month. In that same time, the Consumer Discretionary sector gained 1.96%, while the S&P 500 gained 5.78%.

Analysts and investors alike will be keeping a close eye on the performance of Nike in its upcoming earnings disclosure. In that report, analysts expect Nike to post earnings of $0.86 per share. This would mark year-over-year growth of 30.3%. At the same time, our most recent consensus estimate is projecting a revenue of $12.92 billion, reflecting a 0.71% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.73 per share and revenue of $51.66 billion, indicating changes of +15.48% and +0.86%, respectively, compared to the previous year.

Investors should also take note of any recent adjustments to analyst estimates for Nike. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Nike is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Nike is currently trading at a Forward P/E ratio of 24.71. This valuation marks a premium compared to its industry's average Forward P/E of 16.42.

It is also worth noting that NKE currently has a PEG ratio of 1.78. 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. As the market closed yesterday, the Shoes and Retail Apparel industry was having an average PEG ratio of 1.73.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 22, which puts it in the top 9% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Remember to apply to follow these and more stock-moving metrics during the upcoming trading sessions.

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