Nike Inc. (NYSE: NKE) is scheduled to report its fiscal first-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters call for $0.56 in earnings per share (EPS) on $8.87 billion in revenue. In the same period of last year, Nike posted EPS of $0.67 and $8.41 billion in revenue.
This company recently announced it would drop its golf club business. Apparently something much greater is wrong with the athletic wear company. Currently this is the worst-performing Dow stock in 2016 thus far.
The drop is worse than it seems at first. The Dow is up about 6% for 2016. Twenty-three of the 30 stocks are higher, with 11 up in the double digits.
Much of the worry about Nike is that it has ever more competition, from the very large and direct competitor Adidas to the nimble and fast-growing Under Armour, as well as China’s Li-Ning and ANTA Sports Products. As is the case with many consumer products companies, China is critical to Nike’s future. Local firms often have an edge, as American personal computer firms and Apple have discovered.
Ahead of the earnings report, a few analysts weighed in on Nike:
- B. Riley has a Neutral rating with a $55 price target.
- Deutsche Bank reiterated a Buy rating with a $75 price target.
- Goldman Sachs reiterated a Buy rating with a $66 price target.
- Canaccord Genuity has a Hold rating with a $52 price target.
- Piper Jaffray has a Hold rating with a $58 price target.
- Citigroup reiterated a Buy rating with a $61 price target.
- Brean Capital reiterated a Buy rating.
- Morgan Stanley reiterated a Hold rating with a $60 price target.
- Merrill Lynch has a Hold rating and a $55 price target.
So far in 2016, Nike has underperformed the broad markets, with the stock down 12%. In the past 52 weeks, the tale of the tape practically does not change.
Shares of Nike were trading at $54.70 on Tuesday, with a consensus analyst price target of $65.05 and a 52-week trading range of $51.48 to $68.19.