Nike trades at all time highs ahead of earnings
Fiona Cincotta December 18, 2020 4:05 AM
Nike is due to report Q2 results after seeing its share price refresh its all-time high today, although the rally could starting running out of steam.
When: Friday 18th December
Q1 was much more encouraging thanks to a sharp rise in digital sales of 82% as Nike was quickly able to shift its focus to digital sales. Whilst Nike isn’t immune from the troubles faced by bricks and mortar retailers, it is driving its business in a way that surging digital sales could more than offset those declines.
With the Chinese economy showing strong signs of recovery, sales in China are expected to pick up too. China added 6% growth in Q1 - investors will be hoping for the trend to continue, particularly as Chinese retail sales continue to rise.
Nike could announce a resumption of its share buy back programme which was suspended in March to conserve cash. Nike upped its dividend in November. Should it resume its buyback programme this would send a strong message that management are confident in the outlook.
Finally any clues over holiday sales so far will be watched closely. Even as stores reopen strong digital trends are expected to remain highlighting the strength of the Nike brand
Q2 Revenue $10.55 billion (+2.2% QoQ) and EPS $0.61c (-13% QoQ)
The figures indicate that Nike could see a jiggered path to recovery rather than a straight line higher.
Of the 28 analysts watching Nike:
Strong buy 26
The price target ranges from $115 - $174
Nike has surged over 43% over the past 12 months, outperforming the S&P’s 16.6% return. an impressive run hitting an all time high earlier in the month and refreshing that top today, although the rally higher does appear to be slowing..
Nike trades above its 20, 50 & 100 sma on the 4 hour chart pointing to a bullish trend. The move higher is supported by momentum, the RSI is also in bullish territory over 60, pointing northwards with still some distance to overbought territory.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.