Nike (NKE) Gains But Lags Market: What You Should Know

In the latest trading session, Nike (NKE) closed at $102.71, marking a +1.41% move from the previous day. This move lagged the S&P 500's daily gain of 2.62%. Elsewhere, the Dow gained 3.16%, while the tech-heavy Nasdaq added 2.06%.

NKE will be looking to display strength as it nears its next earnings release, which is expected to be June 25, 2020. On that day, NKE is projected to report earnings of $0.19 per share, which would represent a year-over-year decline of 69.35%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.35 billion, down 18.01% from the year-ago period.

Any recent changes to analyst estimates for NKE should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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, 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 2.32% lower. NKE is currently a Zacks Rank #4 (Sell).

Looking at its valuation, NKE is holding a Forward P/E ratio of 37.77. Its industry sports an average Forward P/E of 29.65, so we one might conclude that NKE is trading at a premium comparatively.

Also, we should mention that NKE has a PEG ratio of 3.09. 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 2.93 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 242, putting it in the bottom 5% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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