Nike Pre-earnings Analysis

Nike Pre-earnings Analysis

Chart done on daily timeframe. Nike is set to report its quarterly earnings today after-hours and expectations are lower than the last three quarters. This means analysts expect Nike’s quarter to come in softer, despite holiday season sales during December. Nike’s last quarter EPS came in at 1.03, analysts are only targeting .69 this quarter. So if Nike beats only modestly beats estimates, it may not be enough to push the stock higher. It would need to report closer to its previous quarter’s EPS to see a big jump. A miss on earnings could be detrimental in the short-term because expectations are already so low. 

Consumer spending on discretionary items has soften in recent months, which could spell trouble for Nike. Adidas, Nike’s biggest rival, recently reported lower guidance for 2024 due to a decline in demand. This could foreshadow Nike’s report. 

Overall, Nike is a solid company that has shown revenue growth during the toughest times so I wouldn’t count it out long term, but the short term will heavily be dependent on these earnings. Nike’s stock slipped strongly on their previous earnings, so these earnings to start the year could set the tone for the rest of it. 

Option chain analysis:

Nike’s option contracts expiring on March 22nd currently reflect an implied volatility reading of about 163%, which translates to about a $7.60 move. Next week’s contracts are reflecting a $8.67 move.