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What's Next For Nike's Stock After Crushing Earnings?

What's Next For Nike's Stock After Crushing Earnings?

Nike, Inc. (NYSE: NKE) handily beat expectations in its fiscal second-quarter earnings report Thursday, but two experts see the stock moving in different directions in 2019.

Chart Pro: Technicals Were 'Falling Apart'

Heading into Nike's earnings print, the stock was trading lower by more than 20 percent from its September highs with several chart technicals "falling apart," Bill Baruch, president of Blue Line Futures told CNBC ahead of the print. Specifically, Nike's stock chart shows it's pushing through the 50 percent retracement level of around $67.50, which is based on the distance from September's high to 2016's lows. The stock's peak levels in 2015 aligns with the key $67.50 level.

"We're going through that right now and that should lead to further selling even if they have a good report," he said.

Analyst: Across The Board Beat

Nike's earnings exceeded expectations "across the board," Oppenheimer's Brian Nagel told CNBC. Nike has shown strong growth in China in past quarters, but Thursday's print showed an acceleration of growth that shouldn't come as a surprise despite heightened political tension between the U.S. and China.

Nike and other sports related companies have been working hard to "bolster their presence" in China, which Nagel said helped build brand recognition with the Chinese consumers in the country. The iconic company succeeded in transforming its brand not only in China but across the world.

"Nike is one of the best marketing companies ever and we see evidence of this particularly as the company pushes outside the United States," he said.

Related Links:

Wedbush: Nike Has Upside Potential Heading Into 2019

Piper Jaffray: Nike, Vans, Amazon, Instagram Reign Supreme With Teens

Nike Store in Detroit. Photo by Emily Elconin.

Latest Ratings for NKE

Nov 2019Initiates Coverage OnOutperform
Oct 2019MaintainsOutperform
Oct 2019UpgradesUnderperformNeutral

View More Analyst Ratings for NKE
View the Latest Analyst Ratings

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