Why Nike stock is up 15% today


Nike stock soars after strong quarterly report

Shares of Nike picked up strong bullish momentum and hit all-time highs after the company released its quarterly earnings report. Nike reported revenue of $12.3 billion and earnings of $0.93 per share, easily beating analysts’ earnings and revenue estimates.

The company has shown strong growth despite recent problems in China. In fact, there was no mention of a boycott in China, and it’s clear that this recent incident has had no significant impact on Nike’s business in the country.

The Nike brand remains very strong and the company reported a gross margin of 45.8% in its fourth fiscal quarter as Nike’s digital efforts continue to bear fruit. The company also noted that it repurchased 50 million of its shares for $4.7 billion during the fourth fiscal quarter.

What’s next for Nike Stock?

The company’s performance is spectacular and analysts have already rushed to modify their estimates. Currently, analysts expect Nike to report earnings of $3.9 per share in the current fiscal year and $4.59 per share in the following fiscal year, but those estimates will be released soon. rewritten.

It is clear that the demand for Nike products is very strong as the company has been able to take advantage of the opportunities presented by the pandemic to accelerate its digital transformation, which has had a positive effect on margins.

Currently, the stock is trading at around 33 PER forward, which is a reasonable valuation level for the current market environment, especially considering Nike’s strong growth.

The 15% jump in a single trading session is a huge step forward for the company whose market capitalization exceeds $200 billion, and it remains to be seen whether Nike stock will be able to gain further momentum in the future. rise in the short term or if it will face some resistance. due to profit taking. In the long term, Nike remains fundamentally attractive.

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This article was originally published on FX Empire

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