Retail

What to Watch For in Nike Earnings

Nike Inc. (NYSE: NKE) will report earnings on Thursday after the close of trading. As a reminder, Nike is now a Dow Jones Industrial Average component. The Thomson Reuters consensus estimates call for $0.72 earnings per share (EPS) and $6.7 billion in revenues. Next quarter estimates are $0.81 EPS and $7.52 billion in revenue.

With shares down 0.5% mid-day on Thursday, the stock is down only about $1.50 from its all-time high. Another issue to watch is that $80 has been a hurdle twice in the past four months.

While $80 has been resistance, Nike shares rallied from $70 to $80 in about five weeks. About $77.50 has acted as near-term support, but the 50-day moving average is down at $75.46 and the 200-day moving average is now all the way down at $71.01.

Earlier in 2014, we gave a bull and bear case for Nike in 2014, and the consensus price target from analysts of $81.36 now is not much different from then. Nike shares are not cheap, particularly for a DJIA component, at 22.5 times next year’s earnings expectations, based on 11% earnings growth and almost 9% sales growth.

Nike may move some of the sports and apparel names like Under Armour, but its earnings report generally is considered to be an isolated event. Trading at $78.62, it has a 52-week range of $53.53 to $80.26.

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