Nike: A Buy or Sell
Recently reported their quarterly gains, many investors looking for a fair size rebound this shoe king. However, with the upcoming recession and the impact on Nike (NKE) stocks, I would hesitate to buy any more shares at such a high price in such an unstable period.
Nike did in their report a few days ago actively promoted the stock the next day by four percent. However, this is also the first time in three quarters, Nike reported earnings per share lower than expected. Although the surprise is not, Nike is usually reported earnings far higher than analysts' estimates, indicating that the profits of the Knicks in the next few years may decline. Quarterly to quarterly has gone through some negative profits, the annual profit is only mediocre, and Nike looks like a disturbing stock for investors in the next few months. This year reached a record high, I can prove that Nike is an overbought stock, waiting to be shortened
The reasoning of such assertions can be based on what type of company Nike is a prerequisite. Selling athletic shoes and other apparel products at above-market prices may not make consumers happy with the impending recession. As concerns about inflation prompted the Federal Reserve to raise interest rates, the company will have a negative impact, such as the decline in purchases. As a result, companies must compensate for the lack of sales by firing employees. This has led to lower domestic incomes and more negative effects on the economy. Because consumers do not spend at previous interest rates, profits will decline for companies that sell products at high prices, such as Nike, and will tell the shareholders the bad news. As Nike fully complies with this description, expect some announcements in the future, especially if there is a hard landing, reduced guidance
Historically, when the recession occurred from 2001 to 2003, Nike slumped to Close to 33%, which is the collapse of large capital companies. When the economy returned to a more prosperous state, Nike's shares due to increased profits and earnings increase, making the end of 2003 than Nike almost 100% ahead of schedule. When the next recession occurs, Nike will follow a similar pattern? The topic is controversial, but Nike seems to follow a relatively cyclical pattern determined by the economy and its fundamentals
Nike's premium PE ratio is close to 17 and the dividend payout ratio is 1.24 points. But because of the economic negative Sex significantly undermined the fundamentals of Nike, and similar to the cyclical stock technology model, I will be very vigilant in the current time to buy any shares of Nike. If you are lucky and have a Nike stock you bought before, I would recommend selling these stocks, collecting your capital gains, and buying Nike shares when the economy goes through this recession