What’s up?

Nike will report fiscal Q3 earnings after the market close on Thursday.

Why is it important?

In general

According to the consensus forecast, earnings per share will account for $0.65, while the revenue will equal $9.65 billion. EPS of $0.68 and $8.98 billion in revenue were posted in the same period of last year.

For investors

Shoe giant’s market value soared in December as it reported double-digit sales growth. Nike has a number of very attractive products that enjoy great demand. The company is shining in comparison with its competitor Adidas, which announced last week that it has supply-chain issues. All in all, Nike is pursuing an active strategy: it’s reducing inventory, diversifying the brand, innovating its products and creating capturing marketing stories around them. The focus of getting more out of digital sales pays off and will likely keep doing so in the future.

All in all, if we analyze the state of things inside the company, it seems like a good investment choice, although the stock is certainly not cheap: its P/E ratio is 34.31, according to Macrotrends. Concerns may emerge from the fact that Nike is counting on Chinese market a lot, while China’s economic growth is slowing down.

For traders

The stock has been in an uptrend since the end of last year and outperformed the broader market. Analysts expect Nike to show strong sales and earnings. Price action during the last 2 days was bearish, so there will be scope for upside if Nike’s financial results are good. The level to watch on the upside is $90. At the same time, the stock is expensive. It pushed too far up from the 50-week MA and lost bullish momentum on W1. Support is at 86.00 ahead of 83.40.  

Weekly chart of Nike stock
Nike Inc, weekly chart

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