Nike Prepares for Second-Quarter Earnings Amidst Tough Market Conditions

Wall Street Awaits Financial Numbers

Nike Inc NKE is set to release its second-quarter earnings report on Thursday. Analysts forecast earnings per share (EPS) of 64 cents and revenues totaling $12.13 billion when the company reports after market hours.

Declining Stock Prices

Over the last year, Nike’s stock has dropped significantly—down 37.30%, with a 19.54% decline in the past six months.

Challenges Persist

Nike has encountered ongoing challenges lately, with growth rates declining sharply. This slump is evident in their stock’s performance, which has suffered under various pressures. After their last four earnings reports, shares have consistently fallen, including a noteworthy drop in October when the company missed revenue expectations and retracted its full-year forecast.

The company has seen weaknesses in both North America and China. Furthermore, a 15% decrease in digital sales and a 13% drop in direct-to-consumer sales have impacted overall performance. Nike’s shift towards prioritizing direct sales instead of wholesale partnerships with retailers like Foot Locker Inc FL and DSW has not yet produced a recovery, making investors wary ahead of the upcoming earnings announcement.

Technical Indicators and Market Sentiment

Nike’s technical charts reveal a negative outlook ahead of their earnings release.

Chart created using Benzinga Pro

Currently, the stock is trading below its eight-day, 20-day, and 50-day exponential moving averages, indicating strong bearish momentum and ongoing selling pressure. Nike’s stock price stands at $76.90, under the eight-day simple moving average (SMA) of $77.57, a 20-day SMA of $77.69, a 50-day SMA of $78.35, and a 200-day SMA of $84.77, suggesting potential further declines.

The moving average convergence/divergence (MACD) at a negative 0.12 indicates a bearish signal, while the relative strength index (RSI) of 46.09 shows that the stock is nearing oversold territory, though it remains neutral for the time being.

Analyst Ratings and Future Outlook

Currently, analysts have a consensus rating of Outperform on Nike’s stock, with an average price target set at $94.10. Reports from Wells Fargo, Evercore ISI Group, and Deutsche Bank suggest a more conservative average price target of $90.33, reflecting a 17% potential upside.

NKE Stock Performance

As of Thursday at publication, Nike’s stock is down 0.065%, trading at $76.85.

Further Reading

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