Analyst Praises "Well-Positioned" Blue-Chip Stock

The firm believes that NKE is well-positioned as it recovers from the pandemic

Assistant Editor
Nov 12, 2020 at 9:28 AM
facebook twitter linkedin


The shares of Nike Inc (NYSE:NKE) are up a modest 0.3% to trade at $128 at last check, after RBC initiated coverage with an "outperform" rating and $145 price target. The firm believes that the athletic apparel stock is well-positioned compared to its peers, as it emerges from the pandemic. The brokerage also said the company may even see earnings upside in the coming years. 

After its late-September post-earnings bull gap, Nike stock continued to trade at record levels even soaring to an all-time high of $136.36 on Nov. 9. The equity's most recent pullback was caught by its long-term support at the 60-day moving average and year-to-date the stock is up 26%. 

RBC is joining a like-minded brokerage party, with 22 of the 25 analysts in coverage at a "buy" or better rating. There remains some room for upgrades however, with the remaining three sporting a tepid "hold."

Despite calls outnumbering puts on an absolute basis, the stock's 50-day put/call volume ratio of 0.70 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 64% of readings in its annual range. In other words, this suggest that long puts are being picked up at a relatively faster-than-usual pace. Should this bearish sentiment begin to unwind, it could catapult the equity higher. 

That said, speculating on NKE's next move with options could be a prudent play. The stock's Schaeffer's Volatility Index (SVI) of 27% stands higher than just 11% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 

Celebrate 40 Years of Schaeffer's With 4 FREE Stock Picks!


 




 
Special Offers from Schaeffer's Trading Partners