Will Nike’s Upcoming Earnings ‘Just Do It’ for Investors?This hasn’t been the greatest year for Nike NYSE:NKE , which will report earnings next Thursday at a time when the stock is down more than 20% year to date. What does technical and fundamental analysis say might happen to the stock from here?
Let’s take a look:
Nike’s Fundamental Analysis
NKE ended Wednesday down 21.4% year to date, and last year wasn't so hot for the athletic-gear giant, either. Shares fell 30.3% over 2024 as a whole.
In fact, it’s been a tough decade so far for Nike, a one-time Wall Street darling.
All in, the stock has fallen some 66.8% since peaking at $179.10 in November 2021. Gross.
Things got so bad that former CEO John Donahoe "retired" in October 2024 -- a retirement that the firm’s board graciously “agreed” to.
The board then pulled in Nike veteran Elliott Hill, who had retired in 2020 after 32 years with the firm, off of the bench to serve as the company’s new CEO.
While it's still early, Hill hasn’t worked much magic so far for the stock, either.
Nike shares have struggled since March, when the firm beat analyst expectations for its fiscal Q3 earnings and revenues but provided poorly received forward guidance.
As for next week’s fiscal Q4 results, the Street is looking for NKE to report just $0.11 of GAAP earning per share on roughly $10.7 billion of revenue.
That would compare badly to the $0.99 of EPS on $12.6 billion of revenues that Nike saw in the same period last year -- an 88.9% decline in earnings per share and about a 15% drop in sales.
In fact, of the 23 sell-side analysts that I’ve found that track the stock, 21 have revised their fiscal Q4 earnings estimates lower since the quarter began. Only two have moved their forecasts to the upside.
Nike’s Technical Analysis
Now let's take a look at NKE’s chart going back some four months:
Readers will see that from early April through mid-June, Nike developed a so-called “rising-wedge” pattern of bearish reversal, marked with purple shading and a red box in the chart above.
Late last week, shares broke through the wedge’s lower trend line at about $62, which is the pivot point here.
Nike also recently gave up its 21-day Exponential Average (or “EMA,” marked with a green line above). That’s likely turned some swing traders against the stock for now.
The stock will now have to look to its 50-day Simple Moving Average (or “SMA,” denoted above with a blue line) for support. That’s at $59.50 in the chart above, but NKE was trading at $59.51 on Friday afternoon as I wrote this.
Should that line crack as well, a certain percentage of portfolio managers would likely have their risk managers force them to reduce long-side exposure to the stock.
But interestingly, readers will also note that from Nike’s late-February high to its early April low, shares hit resistance at the 38.2% Fibonacci retracement level of that move twice -- first in mid-May and then again a month later. This typically implies that there are probably institutional sellers at that level.
Looking at NKE’s other technical indicators, the stock’s Relative Strength Index (the gray line at the chart’s top) is on the weak side of neutral here. It’s not awful, but it also isn’t positive.
Worse, Nike’s daily Moving Average Convergence Divergence indicator (or “MACD,” marked with blue bars and black and gold lines at the chart’s bottom) is postured quite bearishly.
Within that indicator, the 9-day EMA (the blue bars) stands below zero, while the 12-day EMA (the black line) has crossed below the 26-day EMA (the gold line). Those are all typically negative technical signals for a stock.
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle had no position in NKE at the time of writing this column.)
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