Nike (NKE) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Nike (NKE) closed the most recent trading day at $92, moving -0.97% from the previous trading session. This move lagged the S&P 500's daily loss of 0.38%. Elsewhere, the Dow lost 0.46%, while the tech-heavy Nasdaq added 0.17%.

Heading into today, shares of the athletic apparel maker had lost 7.48% over the past month, lagging the Consumer Discretionary sector's loss of 6.46% and the S&P 500's loss of 4.88% in that time.

Wall Street will be looking for positivity from NKE as it approaches its next earnings report date. This is expected to be March 24, 2020. On that day, NKE is projected to report earnings of $0.66 per share, which would represent a year-over-year decline of 2.94%. Meanwhile, our latest consensus estimate is calling for revenue of $10.13 billion, up 5.43% from the prior-year quarter.

NKE's full-year Zacks Consensus Estimates are calling for earnings of $2.96 per share and revenue of $42.01 billion. These results would represent year-over-year changes of +18.88% and +7.41%, respectively.

It is also important to note the recent changes to analyst estimates for NKE. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 1.84% lower. NKE is holding a Zacks Rank of #4 (Sell) right now.

In terms of valuation, NKE is currently trading at a Forward P/E ratio of 31.42. This valuation marks a premium compared to its industry's average Forward P/E of 15.29.

Meanwhile, NKE's PEG ratio is currently 2.26. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NKE's industry had an average PEG ratio of 1.54 as of yesterday's close.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 202, which puts it in the bottom 21% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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