ASO - Nike's Earnings: Two Different Ways To Value The Stock
2024-06-18 14:03:31 ET
Summary
- Nike's Q4 earnings are highly anticipated as investors analyze discretionary spending trends.
- Bulls believe in Nike's strong brand, financial performance, and market share consolidation.
- Bears question Nike's enduring moat and believe its valuation is excessive, leading to a hold rating.
Nike's Q4 earnings represent one of the last events of every Q2 earnings season, with investors ready to read through the report and feel the pulse of discretionary spending as a new quarter approaches. In fact, Nike ( NKE ) closes its fiscal year in May and will thus release its annual report in a few days, making the report even more valuable now that we are halfway through this year. Needless to say, Nike shares were among the pandemic winners, but, after reaching an ATH of $177.51 in late 2021, Nike's stock has underperformed the market and its shares have bottomed just above $80 in late 2022. Since then, the stock has traded mostly flat, never moving above $130. Currently, the technical setup is not encouraging, because we see the stock making lower highs, although support seems to have formed around the $85-$90 range. Bulls hope for a new catalyst, bears wait for the stock to break its support and plunge below $70.