Nike Inc. (NKE) shares are trading lower Friday morning, reversing some of the strength from earlier this week. The pullback comes despite continued insider buying, which usually signals that company leadership sees value at current prices.
The decline mirrors mixed performance across broader markets, with the Dow Jones and S&P 500 showing modest gains while individual stocks face their own pressures.
Leadership Doubles Down on the Stock
Nike CEO Elliott Hill recently filed a Form 4 disclosure showing he purchased 16,388 shares at an average price of $61.10, a transaction worth just over $1 million. This brings his total stake to 241,587 shares. The move follows a similar purchase by Apple Inc. CEO Tim Cook, who bought 50,000 Nike shares at an average price of $58.97.
When CEOs put their own money into the stock, it's worth paying attention. But the market isn't exactly celebrating just yet.
What the Charts Are Saying
The technical picture looks rough. Nike is trading 2.5% below its 20-day simple moving average and 8.1% below its 100-day SMA, a clear bearish trend. Over the past year, shares have dropped 14.93% and are sitting much closer to their 52-week lows than their highs.
The RSI sits at 43.59, which lands in neutral territory—neither oversold nor overbought. Meanwhile, the MACD has crossed below its signal line, indicating bearish momentum. Together, these indicators suggest the stock is caught in a bit of no man's land.
- Key Resistance: $66.50
- Key Support: $59.50
Earnings and Analyst Views
Investors are looking ahead to Nike's next earnings report scheduled for March 19. The expectations aren't exactly thrilling:
- EPS Estimate: 32 cents (down from 54 cents year-over-year)
- Revenue Estimate: $11.24 billion (down from $11.27 billion year-over-year)
- Valuation: Trading at a P/E ratio of 37.3x, which represents a premium valuation
Analyst Consensus: Despite the challenges, analysts maintain a Buy rating on the stock with an average price target of $77.65. That implies roughly 24% upside from current levels. Recent analyst actions include:
- UBS: Neutral rating with target lowered to $62.00
- Citigroup: Neutral rating with target lowered to $65.00
- Barclays: Equal-Weight rating with target lowered to $64.00
Here's the interesting part: Nike trades at a premium multiple even as earnings are expected to fall 41% year-over-year. Analysts apparently see this as a temporary dip rather than a permanent impairment, justifying the optimistic price targets despite the downgrades.
ETF Exposure Worth Watching
Nike carries significant weight in a couple of major ETFs:
- The Consumer Discretionary Select Sector SPDR Fund (XLY): 2.21% weight
- State Street SPDR Russell 1000 Yield Focus ETF (ONEY): 1.17% weight
Why does this matter? When these ETFs see large inflows or outflows, they're forced to automatically buy or sell their holdings to maintain their target allocations. With Nike representing a meaningful chunk of these funds, significant ETF activity could move the stock regardless of company-specific news.
Price Action: Nike shares were down 0.8% at $63.20 at the time of publication Friday.