Investing in Nike: What to Expect and How to Trade It
Nike has been in the spotlight since forming a “death cross” in February, signaling a potential downtrend in the stock. As the company prepares to report earnings after the bell on Thursday, many investors are wondering what to expect and how to approach trading the stock.
At Extreme Investor Network, we believe in providing unique insights and valuable information to help you make informed investing decisions. So, let’s take a closer look at Nike’s recent performance and what investors are anticipating.
Currently, Nike is trading at less than 24 times forward earnings, well below its longer-term average. Despite this, the stock has underperformed the consumer discretionary sector and the S&P 500. Analysts are expecting a modest 0.7% increase in fiscal Q4 revenue, with varying growth estimates across different regions.
One key factor impacting Nike’s valuation is its loss of market share. According to YipitData, Nike’s market share at Dick’s Sporting Goods has declined significantly, while competitors like On Holding and Hoka have seen growth. This decline in sales and market share has led to lower investor confidence and a discounted valuation for Nike.
Looking ahead, some investors believe that the upcoming Paris Olympic Games could help boost Nike’s sales. However, it remains to be seen how much of an impact this event will have on the company’s bottom line.
For investors looking to make a bullish bet on Nike, a diagonal call spread strategy could be worth considering. This strategy involves buying longer-dated call options while selling shorter-term call options to offset costs. By capturing not only the upcoming earnings report but also future ones, investors can potentially benefit from any positive developments in Nike’s performance.
At Extreme Investor Network, we advise caution and suggest consulting with a financial advisor before making any investment decisions. Our goal is to provide you with valuable insights and strategies to help you navigate the complex world of investing.
Stay tuned to Extreme Investor Network for more updates and analysis on Nike and other investment opportunities. Your success is our priority, and we’re here to help you achieve your financial goals.