Back to top

Image: Bigstock

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

Read MoreHide Full Article

Nike (NKE - Free Report) ended the recent trading session at $78.40, demonstrating a -0.65% swing from the preceding day's closing price. This move lagged the S&P 500's daily gain of 0.16%. On the other hand, the Dow registered a loss of 0.37%, and the technology-centric Nasdaq increased by 0.78%.

Shares of the athletic apparel maker have depreciated by 10.74% over the course of the past month, underperforming the Consumer Discretionary sector's gain of 0.21% and the S&P 500's gain of 1.67%.

The upcoming earnings release of Nike will be of great interest to investors. The company's earnings per share (EPS) are projected to be $0.64, reflecting a 37.86% decrease from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $12.18 billion, down 9.01% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $2.74 per share and a revenue of $47.48 billion, demonstrating changes of -30.63% and -7.55%, respectively, from the preceding year.

Investors might also notice recent changes to analyst estimates for Nike. Such recent modifications usually signify the changing landscape of near-term business trends. 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. 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 9.51% fall in the Zacks Consensus EPS estimate. Right now, Nike possesses a Zacks Rank of #5 (Strong Sell).

Looking at its valuation, Nike is holding a Forward P/E ratio of 28.76. This valuation marks a premium compared to its industry's average Forward P/E of 16.59.

We can additionally observe that NKE currently boasts a PEG ratio of 1.92. 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. Shoes and Retail Apparel stocks are, on average, holding a PEG ratio of 1.47 based on yesterday's closing prices.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 199, which puts it in the bottom 22% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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 Zacks.com 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