Nike (NKE) Dips More Than Broader Markets: What You Should Know
In the latest trading session, Nike (NKE) closed at $104.39, marking a -1.6% move from the previous day. This move lagged the S&P 500's daily loss of 0.89%. At the same time, the Dow lost 0.63%, and the tech-heavy Nasdaq lost 0.25%.
Heading into today, shares of the athletic apparel maker had gained 21.18% over the past month, outpacing the Consumer Discretionary sector's gain of 15.05% and the S&P 500's gain of 11.42% in that time.
Nike will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.66, down 20.48% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $12.58 billion, up 10.76% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.97 per share and revenue of $48.97 billion, which would represent changes of -20.8% and +4.84%, respectively, from the prior year.
Any recent changes to analyst estimates for Nike should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 3.88% lower within the past month. Nike is holding a Zacks Rank of #4 (Sell) right now.
Digging into valuation, Nike currently has a Forward P/E ratio of 35.71. This represents a premium compared to its industry's average Forward P/E of 17.63.
It is also worth noting that NKE currently has a PEG ratio of 4.67. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Shoes and Retail Apparel was holding an average PEG ratio of 4.67 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 239, putting it in the bottom 6% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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