On Thursday 18 December Nike is due to release its second-quarter figures. The company’s adjusted earnings per share are called lower at 69.9 cents down from 109 cents with sales also lower down to $7.145 billion from $7.982 billion. The company’s pre-tax profits for the quarter are also called lower at $824.32 million off from $1.229 billion.
At the moment, Nike shares have been the best performing in the Dow over the last three months, up just shy of 24% with only Visa close to being comparable. This strong performance goes some way to explaining the institutional opinion of the company with 21 firms rating the company a buy, 11 a hold and none with a sell recommendation.
One word of caution; the average price target is $98.48 and the shares are already trading above this level. Historically December is not a big month for the company and the last three months of the year normally see a tail off in revenue. The more summer-targeted apparel that Nike sells naturally see a tail off at this time of year.
Nike shares opened the year at $78.03 and have now risen to just below the psychological $100 level. However, psychological levels tend to be seen as target rather than resistance by US investors. The divergence away from the 200-day moving average and the move into overbought territory does make it feel a little overcooked.