Pre-Earnings Bear Notes Roll in for Nike Stock

The majority of analysts were still bullish coming into today

Deputy Editor
Mar 17, 2022 at 9:37 AM
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A number of analysts have cut their price objective on blue-chip apparel maker Nike Inc (NYSE:NKE). This round of bear notes comes ahead of the company's fiscal third-quarter earnings report, which is due out after the close on Monday, March 21. Jefferies, which lowered its price target to $185 from $200, but kept its "buy" rating, noted a "volatile macroeconomic backdrop" ahead of the company's earnings event, but added that the brand still sustains a "dominating share" of the web data the firm tracks. 

Between today and yesterday, no less than six additional analysts cut their price targets on Nike stock. Stifel made the largest move, lowering its objective all the way down to $160 from $202. Coming into today, 19 of the 22 covering brokerages rated NKE a "buy" or better, while the 12-month consensus price target of $169.78 was a 35.6% premium to last night's close.

Nike stock is muted in response to the bevy of bear notes, last seen up 0.1% to trade at $125.37. On the charts, the equity is rebounding from a March 14 dip to $116.75 -- its lowest level of trading since September 2020. In 2022, NKE has shed nearly 25%.

During the last two year, NKE has averaged a 7.8% post-earnings move, regardless of direction. Of these last eight reports, five of Nike stock's next-day sessions were positive, including a 6.1% gain in December. 

Options traders have been much more pessimistic ahead of NKE's earnings event. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 1.06 sits higher than 92% of readings from the past year, indicating puts have been picked up at a much quicker-than-usual clip over the last two weeks

It's also worth noting the stock's Schaeffer's Volatility Scorecard (SVS) sits at 97 out of 100, meaning the equity has exceeded option traders' volatility expectations during the past year.


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