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

Zacks Equity Research

In the latest trading session, Nike (NKE) closed at $79.51, marking a -1.88% move from the previous day. This change lagged the S&P 500's daily gain of 0.25%. At the same time, the Dow added 0.39%, and the tech-heavy Nasdaq lost 0.09%.

Prior to today's trading, shares of the athletic apparel maker had lost 7.39% over the past month. This has was narrower than the Consumer Discretionary sector's loss of 9.49% and lagged the S&P 500's loss of 5.58% 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 $0.71, up 5.97% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $10.45 billion, up 5.04% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.90 per share and revenue of $42.21 billion, which would represent changes of +16.47% and +7.91%, respectively, from the prior year.

Any recent changes to analyst estimates for NKE should also be noted by investors. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection remained stagnant. NKE currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that NKE has a Forward P/E ratio of 27.9 right now. This valuation marks a premium compared to its industry's average Forward P/E of 14.03.

Also, we should mention that NKE has a PEG ratio of 2.15. 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 1.31 at yesterday's closing price.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 83, which puts it in the top 33% 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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