Nike's Earnings Loom With Bearish Signals: Will The Swoosh Bounce Back?

Zinger Key Points

Nike's stock is down 37.30% year-over-year, with bearish technical signals ahead of second quarter earnings.
Wall Street analysts' $90.33 average price target implies a 17% upside despite recent sales and performance struggles.
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Nike Inc NKE will be reporting its second-quarter earnings on Thursday. Wall Street expects 64 cents in EPS and $12.13 billion in revenues as the company reports after market hours.

The stock is down 37.30% over the past year, 19.54% over the past six months.

Nike Facing Slowing Growth, Stock Slipping

Nike has faced consistent challenges in recent quarters, with growth slowing and stock performance reflecting the headwinds.

Shares have gapped down after earnings in four consecutive reports, including October, when the company missed revenue expectations and withdrew its full-year guidance.

Weakness in North America and China, coupled with a 15% drop in digital sales and a 13% decline in direct-to-consumer sales, has weighed heavily on results. Nike's strategic pivot to prioritize direct sales over wholesale channels like Foot Locker Inc FL and DSW has yet to deliver the desired rebound, leaving investors cautious ahead of its upcoming earnings release.

Let’s look at what the charts indicate for Nike stock and how the stock currently maps against Wall Street estimates.

Nike Stock Chart Bearish Ahead Of Q2 Earnings

Nike’s technical indicators paint a bearish picture ahead of its earnings release.

Chart created using Benzinga Pro

The stock is trading below its eight-day, 20-day and 50-day exponential moving averages, signaling strong bearish momentum and sustained selling pressure. With Nike stock at $76.90, below the eight-day simple moving average (SMA) of $77.57, 20-day SMA of $77.69, 50-day SMA of $78.35 and 200-day SMA of $84.77, the trend points to potential for further downside.

The moving average convergence/divergence (MACD) indicator at a negative 0.12 confirms a bearish signal, while the relative strength index (RSI) at 46.09 suggests the stock is approaching oversold territory but remains neutral for now.

Nike Analysts See 17% Upside

Ratings & Consensus Estimates: The consensus analyst rating on Nike stock stands at an Outperform currently with a price target of $94.10. The latest analyst ratings from Wells Fargo, Evercore ISI Group and Deutsche Bank suggest an average price target of $90.33 for Nike stock, implying a 17% upside potential.

NKE Price Action: Nike stock is down 0.065% at $76.85 at publication on Thursday.

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