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

Zacks Equity Research

Nike (NKE) closed at $92.90 in the latest trading session, marking a -0.47% move from the prior day. This change lagged the S&P 500's 0.75% gain on the day. Elsewhere, the Dow gained 0.69%, while the tech-heavy Nasdaq added 1.32%.

Heading into today, shares of the athletic apparel maker had gained 2.01% over the past month, lagging the Consumer Discretionary sector's gain of 4.54% and the S&P 500's gain of 3.42% in that time.

NKE will be looking to display strength as it nears its next earnings release. On that day, NKE is projected to report earnings of $0.57 per share, which would represent year-over-year growth of 9.62%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.08 billion, up 7.53% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.97 per share and revenue of $42.23 billion, which would represent changes of +19.28% and +7.96%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for NKE. 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.

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.

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 has moved 0.05% higher. NKE is currently sporting a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that NKE has a Forward P/E ratio of 31 right now. This represents a premium compared to its industry's average Forward P/E of 16.28.

Investors should also note that NKE has a PEG ratio of 2.37 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. Shoes and Retail Apparel stocks are, on average, holding a PEG ratio of 1.9 based on yesterday's closing prices.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 49, putting it in the top 20% 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.


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