Nike Stock Stuck In Channel Ahead of Earnings (NKE)

After today’s close of trading, we’ll get to see the earnings report out of Nike (NYSE: NKE).  First Call has estimates at $0.81 EPS and $4.36 Billion in revenues.  Next quarter is also its fiscal year end and estimates are $0.97 EPS on $4.85 Billion in revenues.  While estimates for Fiscal May-2008 are $3.58 EPS, its May-2009 fiscal estimates from First Call are $3.89 EPS on $19.86 Billion.

One thing has become front and center for Nike, and that is its international sales and it seeing a big earnings jump because the US Dollar has weakened over and over.

With shares up about 1% today at $62.50, they have traded between $51.50 to $67.93 over the last 52-weeks.  For most of the last year this has traded between $55.00 and $65.00.  Analysts have an average price target of close to $71.00.  Keep in mind that options expire tomorrow, but it looks like traders are braced for a  move of up to $2.00 in either direction.

The leader in sports apparel has a current year P/E ratio of 17.5 if it hits its mark, and ahead to next year its forward P/E ratio is 16 on a rounded basis.  The value is in having the perhaps world’s strongest sporting apparel and sporting goods brand.  The question over value versus price boils down to how much of a market premium you think it deserves because of that brand leader strength. 

Jon C. Ogg
March 19, 2008