Nike (NKE) Stock Slides as Market Rises: Facts to Know Before You Trade

Nike (NKE) ended the recent trading session at $39.48, demonstrating a -3.12% change from the preceding day's closing price. The stock's performance was behind the S&P 500's daily gain of 0.32%. Meanwhile, the Dow gained 0.3%, and the Nasdaq, a tech-heavy index, added 0.66%.

The stock of athletic apparel maker has fallen by 3.3% in the past month, lagging the Consumer Discretionary sector's gain of 7.58% and the S&P 500's gain of 3.34%.

Investors will be eagerly watching for the performance of Nike in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.44, marking a 10.2% fall compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $11.46 billion, indicating a 2.18% downward movement from the same quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.74 per share and a revenue of $46.26 billion, representing changes of +10.13% and -0.3%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Nike. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% lower. Nike is currently a Zacks Rank #3 (Hold).

In the context of valuation, Nike is at present trading with a Forward P/E ratio of 23.43. This indicates a premium in contrast to its industry's Forward P/E of 12.91.

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 the market closed yesterday, the Shoes and Retail Apparel industry was having an average PEG ratio of 1.61.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 35, placing it within the top 15% of over 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.

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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