Nike (NKE) Declines More Than Market: Some Information for Investors

Nike (NKE) ended the recent trading session at $39.09, demonstrating a -4.02% change from the preceding day's closing price. This change lagged the S&P 500's daily loss of 0.52%. On the other hand, the Dow registered a loss of 0.51%, and the technology-centric Nasdaq decreased by 0.32%.

Coming into today, shares of the athletic apparel maker had lost 6.92% in the past month. In that same time, the Consumer Discretionary sector gained 5.72%, while the S&P 500 gained 3.3%.

Analysts and investors alike will be keeping a close eye on the performance of Nike in its upcoming earnings disclosure. In that report, analysts expect Nike to post earnings of $0.44 per share. This would mark a year-over-year decline of 10.2%. In the meantime, our current consensus estimate forecasts the revenue to be $11.46 billion, indicating a 2.18% decline compared to the corresponding quarter of the prior year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.74 per share and revenue of $46.26 billion, indicating changes of +10.13% and -0.3%, respectively, compared to the previous year.

Investors might also notice recent changes to analyst estimates for Nike. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection has moved 0.86% lower. Nike is currently sporting a Zacks Rank of #4 (Sell).

In terms of valuation, Nike is presently being traded at a Forward P/E ratio of 23.42. This denotes a premium relative to the industry average Forward P/E of 13.01.

It's also important to note that NKE currently trades at a PEG ratio of 1.81. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Shoes and Retail Apparel industry held an average PEG ratio of 1.76.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 61, this industry ranks in the top 25% of all industries, numbering over 250.

The Zacks Industry Rank is ordered 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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