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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 $79.14, marking a +0.34% move from the previous day. This change outpaced the S&P 500's 0.21% gain on the day. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq added 0.27%.

Coming into today, shares of the athletic apparel maker had lost 8.18% in the past month. In that same time, the Consumer Discretionary sector lost 6.48%, while the S&P 500 lost 5.26%.

NKE will be looking to display strength as it nears its next earnings release. In that report, analysts expect NKE to post earnings of $0.67 per share. This would mark a year-over-year decline of 2.9%. Meanwhile, our latest consensus estimate is calling for revenue of $10.16 billion, up 3.82% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.54 per share and revenue of $39.09 billion. These totals would mark changes of +4.96% and +7.4%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for NKE. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 past month, the Zacks Consensus EPS estimate has moved 0.27% lower. NKE currently has a Zacks Rank of #4 (Sell).

Investors should also note NKE's current valuation metrics, including its Forward P/E ratio of 31. For comparison, its industry has an average Forward P/E of 13.55, which means NKE is trading at a premium to the group.

Investors should also note that NKE has a PEG ratio of 2.38 right now. 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 1.7 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 69, putting it in the top 27% 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.

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


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