In the latest trading session, Nike (NKE) closed at $111.83, marking a +1.9% move from the previous day. This move outpaced the S&P 500’s daily gain of 1%. Meanwhile, the Dow gained 1.35%, and the Nasdaq, a tech-heavy index, added 0.6%.
Heading into today, shares of the athletic apparel maker had gained 11.65% over the past month, outpacing the Consumer Discretionary sector’s gain of 4.03% and the S&P 500’s gain of 4.48% in that time.
Wall Street will be looking for positivity from NKE as it approaches its next earnings report date. The company is expected to report EPS of $0.41, down 52.33% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.05 billion, down 15.09% from the year-ago period.
NKE’s full-year Zacks Consensus Estimates are calling for earnings of $2.30 per share and revenue of $39.38 billion. These results would represent year-over-year changes of +43.75% and +5.28%, respectively.
Investors should also note any 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.
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. Within the past 30 days, our consensus EPS projection has moved 2.94% higher. NKE currently has a Zacks Rank of #4 (Sell).
Valuation is also important, so investors should note that NKE has a Forward P/E ratio of 47.78 right now. For comparison, its industry has an average Forward P/E of 30.2, which means NKE is trading at a premium to the group.
Also, we should mention that NKE has a PEG ratio of 2.93. 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 3.21 at yesterday’s closing price.
The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 222, putting it in the bottom 13% of all 250+ industries.
The Zacks Industry Rank includes is listed in order 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.