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

Zacks

Nike (NKE) closed the most recent trading day at $82.63, moving +0.65% from the previous trading session. This move outpaced the S&P 500′s daily gain of 0.37%. Meanwhile, the Dow gained 0.44%, and the Nasdaq, a tech-heavy index, added 0.61%.

Coming into today, shares of the athletic apparel maker had gained 2.43% in the past month. In that same time, the Consumer Discretionary sector lost 0.09%, while the S&P 500 gained 1.82%.

NKE will be looking to display strength as it nears its next earnings release, which is expected to be September 25, 2018. The company is expected to report EPS of $0.62, up 8.77% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $9.88 billion, up 8.89% from the prior-year quarter.

NKE’s full-year Zacks Consensus Estimates are calling for earnings of $2.62 per share and revenue of $39.25 billion. These results would represent year-over-year changes of +8.26% and +7.83%, respectively.


It is also important to note the recent changes to analyst estimates for NKE. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. The Zacks Consensus EPS estimate has moved 0.23% higher within the past month. NKE is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, NKE is currently trading at a Forward P/E ratio of 31.34. This valuation marks a premium compared to its industry’s average Forward P/E of 17.68.

It is also worth noting that NKE currently has a PEG ratio of 2.74. 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. The Shoes and Retail Apparel was holding an average PEG ratio of 1.64 at yesterday’s closing price.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 61, which puts it in the top 24% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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