Nike (NKE) Dips More Than Broader Markets: What You Should Know
Nike (NKE) closed the most recent trading day at $125.73, moving -1.47% from the previous trading session. This change lagged the S&P 500's 0.61% loss on the day. Meanwhile, the Dow lost 0.1%, and the Nasdaq, a tech-heavy index, lost 0.67%.
Prior to today's trading, shares of the athletic apparel maker had gained 2.47% over the past month. This has lagged the Consumer Discretionary sector's gain of 16.21% and the S&P 500's gain of 8.32% in that time.
Investors will be hoping for strength from Nike as it approaches its next earnings release. The company is expected to report EPS of $0.51, down 41.38% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $11.37 billion, up 4.56% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.11 per share and revenue of $49.98 billion. These totals would mark changes of -17.07% and +6.99%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Nike. 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.
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.
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 0.22% higher. Nike currently has a Zacks Rank of #2 (Buy).
In terms of valuation, Nike is currently trading at a Forward P/E ratio of 41.04. For comparison, its industry has an average Forward P/E of 14.57, which means Nike is trading at a premium to the group.
We can also see that NKE currently has a PEG ratio of 4.28. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Shoes and Retail Apparel industry currently had an average PEG ratio of 4.28 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 158, putting it in the bottom 38% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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