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Why Nike (NKE) Dipped More Than Broader Market Today

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Nike (NKE - Free Report) closed at $103.54 in the latest trading session, marking a -1.56% move from the prior day. The stock's change was less than the S&P 500's daily loss of 1.43%. On the other hand, the Dow registered a loss of 0.32%, and the technology-centric Nasdaq decreased by 2.43%.

The the stock of athletic apparel maker has risen by 16.65% in the past month, leading the Consumer Discretionary sector's gain of 0.12% and the S&P 500's loss of 1.55%.

The upcoming earnings release of Nike will be of great interest to investors. The company is forecasted to report an EPS of $0.85, showcasing no movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $13.41 billion, showing a 0.72% escalation compared to the year-ago quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.74 per share and revenue of $53.14 billion, indicating changes of +15.79% and +3.75%, respectively, compared to the previous year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Nike. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Over the past month, there's been a 1.2% rise in the Zacks Consensus EPS estimate. Nike is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Nike is holding a Forward P/E ratio of 28.1. This indicates a premium in contrast to its industry's Forward P/E of 14.32.

One should further note that NKE currently holds a PEG ratio of 1.74. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Shoes and Retail Apparel stocks are, on average, holding a PEG ratio of 1.13 based on yesterday's closing prices.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 81, positioning it in the top 33% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. 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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