Why Nike Shares Are Up 15% Today

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Nike stock soars after strong quarterly report

Nike shares took a strong push to the upside and hit all-time highs after the company released its quarterly earnings report. Nike reported sales of $ 12.3 billion and earnings of $ 0.93 per share, easily exceeding analysts’ estimates in terms of earnings and revenue.

The company has shown strong growth despite recent problems in China. In fact, there was no mention of a boycott in China, and it is clear that this recent incident had no material impact on Nike’s operations in the country.

The Nike brand remains very strong and the company posted a gross margin of 45.8% in its fiscal fourth quarter as Nike’s digital efforts continue to bear fruit. The company also noted that it repurchased 50 million of its shares for $ 4.7 billion in the fiscal fourth quarter.

What’s next for Nike Stock?

The performance of the company is spectacular and analysts have already rushed to change their estimates. Currently, analysts predict that Nike will report earnings of $ 3.9 per share in the current fiscal year and $ 4.59 per share in the next fiscal year, but those estimates will soon be rewritten.

It is obvious that the demand for Nike products is very strong as the company has taken advantage of the opportunities offered by the pandemic to accelerate its digital transformation, which has had a positive effect on margins.

Currently, the stock is trading at around 33 P / E futures, which is a reasonable level of valuation for the current market environment, especially considering Nike’s strong growth.

The 15% jump in a single trading session is a huge step forward for the company with a market cap of over $ 200 billion, and it remains to be seen whether Nike stock will be able to gain any bullish momentum. additional short term or if it will face some resistance. due to profit taking. In the long run, Nike remains fundamentally attractive.

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