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

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The most recent trading session ended with Nike (NKE - Free Report) standing at $95.87, reflecting a -0.14% shift from the previouse trading day's closing. This change lagged the S&P 500's daily gain of 0.27%. Elsewhere, the Dow lost 0.31%, while the tech-heavy Nasdaq added 0.88%.

Shares of the athletic apparel maker witnessed a gain of 3.54% over the previous month, beating the performance of the Consumer Discretionary sector with its gain of 1.03% and the S&P 500's gain of 2.85%.

Market participants will be closely following the financial results of Nike in its upcoming release. The company plans to announce its earnings on June 27, 2024. The company's earnings per share (EPS) are projected to be $0.86, reflecting a 30.3% increase from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $12.91 billion, up 0.68% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Nike. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. At present, Nike boasts a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Nike has a Forward P/E ratio of 24.3 right now. This represents a premium compared to its industry's average Forward P/E of 16.83.

Meanwhile, NKE's PEG ratio is currently 1.75. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Shoes and Retail Apparel stocks are, on average, holding a PEG ratio of 1.79 based on yesterday's closing prices.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This industry, currently bearing a Zacks Industry Rank of 23, finds itself in the top 10% echelons of all 250+ industries.

The Zacks Industry Rank is ordered 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.

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

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