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Nike (NKE) Gains But Lags Market: What You Should Know

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In the latest trading session, Nike (NKE) closed at $164.22, marking a +0.45% move from the previous day. The stock lagged the S&P 500's daily gain of 0.48%.

Coming into today, shares of the athletic apparel maker had gained 9.29% in the past month. In that same time, the Consumer Discretionary sector lost 0.25%, while the S&P 500 gained 3.46%.

NKE will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.62, down 20.51% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $11.23 billion, down 0.09% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.56 per share and revenue of $47.11 billion. These totals would mark changes of 0% and +5.76%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for NKE. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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.

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 14.4% lower within the past month. NKE is holding a Zacks Rank of #5 (Strong Sell) right now.

In terms of valuation, NKE is currently trading at a Forward P/E ratio of 45.87. Its industry sports an average Forward P/E of 19.48, 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 3.15. 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. Shoes and Retail Apparel stocks are, on average, holding a PEG ratio of 1.07 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 162, which puts it in the bottom 37% 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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