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

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In the latest trading session, Nike (NKE - Free Report) closed at $77.53, marking a +1.24% move from the previous day. This move outpaced the S&P 500's daily gain of 0.56%. At the same time, the Dow added 0.76%, and the tech-heavy Nasdaq lost 0.38%.

Prior to today's trading, shares of the athletic apparel maker had lost 4.49% over the past month. This has was narrower than the Consumer Discretionary sector's loss of 5.91% and the S&P 500's loss of 6.76% in that time.

Investors will be hoping for strength from NKE as it approaches its next earnings release, which is expected to be December 20, 2018. On that day, NKE is projected to report earnings of $0.45 per share, which would represent a year-over-year decline of 2.17%. Meanwhile, our latest consensus estimate is calling for revenue of $9.14 billion, up 6.9% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.62 per share and revenue of $39.05 billion, which would represent changes of +8.26% and +7.29%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for NKE. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. NKE is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, NKE is currently trading at a Forward P/E ratio of 29.18. This represents a premium compared to its industry's average Forward P/E of 17.11.

Also, we should mention that NKE has a PEG ratio of 2.39. 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. The Shoes and Retail Apparel was holding an average PEG ratio of 1.71 at yesterday's closing price.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 52, putting it in the top 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

You can find more information on all of these metrics, and much more, on Zacks.com.




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