U.S. Markets closed

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

Zacks Equity Research
IBM (IBM) closed at $134.95 in the latest trading session, marking a -0.15% move from the prior day.

In the latest trading session, Nike (NKE) closed at $85.85, marking a +0.68% move from the previous day. This move lagged the S&P 500's daily gain of 0.96%. At the same time, the Dow added 0.75%, and the tech-heavy Nasdaq gained 1.58%.

Coming into today, shares of the athletic apparel maker had lost 0.01% in the past month. In that same time, the Consumer Discretionary sector gained 5.48%, while the S&P 500 gained 1.85%.

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%. Our most recent consensus estimate is calling for quarterly revenue of $10.17 billion, up 3.89% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.55 per share and revenue of $39.10 billion, which would represent changes of +5.37% and +7.41%, 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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 remained stagnant within the past month. NKE is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, NKE is currently trading at a Forward P/E ratio of 33.42. This valuation marks a premium compared to its industry's average Forward P/E of 16.15.

Investors should also note that NKE has a PEG ratio of 2.57 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. NKE's industry had an average PEG ratio of 1.79 as of yesterday's close.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 93, putting 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NIKE, Inc. (NKE) : Free Stock Analysis Report
To read this article on Zacks.com click here.