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Nike (NKE) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 min read

Nike (NKE) closed the most recent trading day at $130.11, moving +1.43% from the previous trading session. This change outpaced the S&P 500's 1.17% gain on the day. At the same time, the Dow added 1.6%, and the tech-heavy Nasdaq gained 0.8%.

Coming into today, shares of the athletic apparel maker had lost 0.56% in the past month. In that same time, the Consumer Discretionary sector gained 3.07%, while the S&P 500 gained 2.26%.

Wall Street will be looking for positivity from NKE as it approaches its next earnings report date. This is expected to be December 18, 2020. In that report, analysts expect NKE to post earnings of $0.62 per share. This would mark a year-over-year decline of 11.43%. Meanwhile, our latest consensus estimate is calling for revenue of $10.61 billion, up 2.79% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.83 per share and revenue of $42.18 billion. These totals would mark changes of +76.88% and +12.77%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for NKE. Recent revisions tend to reflect the latest near-term business trends. 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. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.85% higher. NKE is holding a Zacks Rank of #1 (Strong Buy) right now.

Digging into valuation, NKE currently has a Forward P/E ratio of 45.33. Its industry sports an average Forward P/E of 37.76, so we one might conclude that NKE is trading at a premium comparatively.

Investors should also note that NKE has a PEG ratio of 2.72 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. The Shoes and Retail Apparel was holding an average PEG ratio of 3.02 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 36, putting it in the top 15% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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


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