Back to top

Image: Bigstock

Nike (NKE) Stock Sinks As Market Gains: Here's Why

Read MoreHide Full Article

The latest trading session saw Nike (NKE - Free Report) ending at $96, denoting a -0.57% adjustment from its last day's close. This change lagged the S&P 500's daily gain of 0.26%. Meanwhile, the Dow gained 0.18%, and the Nasdaq, a tech-heavy index, added 0.35%.

The athletic apparel maker's stock has climbed by 6.17% in the past month, exceeding the Consumer Discretionary sector's gain of 0.59% and the S&P 500's gain of 3.25%.

Analysts and investors alike will be keeping a close eye on the performance of Nike in its upcoming earnings disclosure. The company's earnings report is set to go public on June 27, 2024. The company is predicted to post an EPS of $0.86, indicating a 30.3% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $12.91 billion, showing a 0.68% escalation compared to the year-ago quarter.

Investors should also note any recent changes to analyst estimates for Nike. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. At present, Nike boasts a Zacks Rank of #3 (Hold).

In terms of valuation, Nike is currently trading at a Forward P/E ratio of 24.44. For comparison, its industry has an average Forward P/E of 16.96, which means Nike is trading at a premium to the group.

It's also important to note that NKE currently trades at a PEG ratio of 1.76. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Shoes and Retail Apparel industry currently had an average PEG ratio of 1.79 as of yesterday's close.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 26, this industry ranks in the top 11% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

NIKE, Inc. (NKE) - free report >>

Published in