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Nike (NKE) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Nike (NKE) closed at $89.55 in the latest trading session, marking a -0.71% move from the prior day. This move lagged the S&P 500's daily loss of 0.3%. At the same time, the Dow lost 0.52%, and the tech-heavy Nasdaq lost 0.14%.

Heading into today, shares of the athletic apparel maker had lost 1.42% over the past month, lagging the Consumer Discretionary sector's gain of 2.36% and the S&P 500's gain of 2.46% in that time.

Investors will be hoping for strength from NKE as it approaches its next earnings release. The company is expected to report EPS of $0.58, up 11.54% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.08 billion, up 7.52% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.98 per share and revenue of $42.24 billion, which would represent changes of +19.68% and +7.98%, respectively, from the prior year.

Investors might also notice 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. 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.44% higher. NKE is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that NKE has a Forward P/E ratio of 30.27 right now. Its industry sports an average Forward P/E of 15.99, so we one might conclude that NKE is trading at a premium comparatively.

It is also worth noting that NKE currently has a PEG ratio of 2.32. 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. NKE's industry had an average PEG ratio of 1.64 as of yesterday's close.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 37% 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.

To follow NKE in the coming trading sessions, be sure to utilize Zacks.com.


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