Key points:
- Nike stock fell 1% ahead of the release of its Q1 earnings results.
- The stock fell despite many analysts calling for a bottom in NKE shares.
- So, should you buy NKE shares ahead of earnings? Read on to find out.
The Nike Inc (NYSE: NKE) stock price fell 1% despite many analysts saying that the global sportswear company’s shares should rally after it releases its fiscal Q1 earnings results later today.
Matthew Boss, an analyst at JPMorgan, issued a note saying that based on the recent call and put options volume on Nike stock, he believes that peak negativity has already been baked into Nike stock and that the most likely path for the shares is up.
He maintained an overweight rating on the stock with a $130 price target. Luckily, he is not the only analyst that thinks Nike stock will turn around sooner rather than later. Other analysts have expressed the same sentiments about the international sportswear company.
Other analysts have pointed out that the Chinese market could recover ahead of the US market, compensating for the lower revenues from the US as the country teeters on the edge of a recession.
Many say that Nike shares could be near their long-term bottom, having broken below the crucial $100 support level. However, a rally to trade back above this crucial level is imminent if the company’s latest earnings results are better than expected.
However, today’s price action does not seem to support the consensus view among analysts since Nike shares were trading lower at writing a few hours before the company released its quarterly results, which many are eagerly awaiting.
Still, we cannot say that Nike stock will trade lower after the earnings until they are released since stocks tend to reverse declines and edge higher after the release of positive earnings data.
Many could argue that the recent decline in Nike shares has further lowered the risk associated with the stock, which has fallen 41% since the year started, and they would be right. But until we get a move higher, there is still a risk that the stock could fall further.
Meanwhile, investors will have to wait for Nike’s quarterly results and the accompanying price action before concluding whether the stock will reverse course and rally higher or investors are in for further losses.
*This is not investment advice.
Nike stock price.
The Nike stock price fell 1.06% to trade at $97.65, falling from Wednesday’s closing price of $98.70.