Nike Stock Hit With Bear Note as Earnings Loom

Needham cut Nike's price target today to $80

Managing Editor
Mar 23, 2020 at 2:39 PM
facebook twitter linkedin


When we last checked in with Nike Inc (NYSE:NKE), the blue chip retailer was just beginning to feel the pinch of coronavirus-induced headwinds. Seven weeks later, Nike stock is nursing a nasty 37.3% loss year-to-date. What's more, the swoosh logo steps into the earnings confessional for its fiscal third-quarter report after-the-close tomorrow, March 24. Ahead of the event, options traders are bracing for a larger-than-normal post-earnings move. 

Looking at Nike's earnings history, the stock saw negative returns during three of the last eight sessions, including a 1.2% dip in December and a 6.6% drop last March. This time around the options pits are pricing in a 15.8% next-day swing, regardless of direction, almost four times bigger than the 4% post-earnings move averaged during the past two years.

At last check, Nike stock was trading down 6.5% at $62.73 after Needham cut its price target to $80 from $105. The shares have faced stiff pressure from their 10-day moving average the last two months, although 18 out of 25 analysts in coverage still rate NKE a "buy" or better.

Daily Stock Chart NKE

The options pits are quite put-heavy. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NKE sports a 50-day put/call volume ratio of 2.29. This ratio sits four percentage points from an annual high, suggesting long puts have been picked up at a slightly quicker-than-usual clip. Today, the most popular front-month contract is the weekly 3/27 65-strike put, where new positions are being opened.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners