Nike Inc. (NYSE: NKE) stock has reached its lowest level since October 2014, according to a recent market report. The stock has fallen 78.2% from its high in November 2021, making it one of Wall Street’s top laggards. The company was recently removed from the blue-chip S&P 500 Index due to slowing revenue growth and increased competition.
Under the leadership of CEO Elliot Hill, Nike is executing a turnaround strategy focused on cost cuts, repairing relationships with wholesalers, and emphasizing sports. However, the most recent earnings reports indicated that the turnaround is taking longer than analysts expected. The upcoming earnings report is expected to be closely watched for signs of improvement.
Analysts predict that Nike’s quarterly revenue will drop by 3.38% to $11.32 billion. Guidance for the current quarter is expected to show a 4.80% revenue decline to $11.83 billion. Profitability is also projected to decline, with earnings-per-share estimated to fall to 44 cents from 49 cents in the same period last year.
Despite the expected weak numbers, the stock is currently trading at a premium valuation. Its forward price-to-earnings ratio is 21, which is higher than the sector median of 14 and the S&P 500 Index average of 19.1. Technical indicators show the stock is highly oversold, with the Relative Strength Index (RSI) falling to 29. The stock is also trading below its 50-week Exponential Moving Average of $49.
