Nike is expected to report earnings of $0.65 on revenue of $12.6bn tomorrow. Its share price is currently sat around $106.34 a share.
Overview
Nike, Inc. is an American multinational corporation that creates, develops, produces, markets, and sells shoes, clothes, equipment, accessories, and services on a global scale. The business has its headquarters in the Portland metro area, close to Beaverton, Oregon. It is a significant producer of sports equipment and the world's leading provider of athletic footwear and gear.
Financials
Looking at Nike’s financial year of 2022, the revenue and gross profit grew by almost $2bn year-on-year. Despite recession fears, Nike could see a slight spike due to the festive period and going into the new year. EBITDA only rose marginally but net income after taxes and expenses totalled $6,046bn, up from $5,727bn. This led to an increase in EPS of $0.19 YoY. Looking at the balance sheet, the figures were pretty strong as expected. Total assets rose by over $3bn and total liabilities remained around the $25bn mark, with its cash on hand still around $13bn. As a result, total equity came in at $15.2bn. Up $2.5bn from the prior year.
Technicals
From a technical aspect, Nike’s shares are currently trading at around $106.34 a share. On the daily timeframe, the stock has broken through the trendline that was acting as support. Further support levels sit at $105.11 then at $104.53 then at $103.64. A break below these support levels could see its share price slide further towards the $100-$102 price range. However, Nike is set to report some quarterly earnings tomorrow. A positive report could result in a spike higher, hence towards the upside, resistance sits at $107.63 then at $108.28 then at $109.27. A spike above $109.27 may see the stock climb towards the $110-$112 price range. Looking at the technical indicators, MACD is negative but RSI is neutral as it reads 49.
Summary
Overall, the financials of Nike remain strong. Revenue and profit continue to grow with Nike still in the position as the market leader. With the festive period now upon us, a spike in sales and revenue is more likely which would have a positive impact going into 2023. With recession fears surrounding the global economy, occasional financial dips throughout the quarters may occur, but nothing major that could cause the stock’s share price to plummet. The balance sheet highlights healthy and growing operations with a chunky cash-on-hand pile still in place. On the basis of the technicals, the indicators do not portray a clear direction as they are currently mixed. The support has been broken on the daily timeframe and further short-term downside is possible. Although, note to investors, tomorrow’s earnings report will offer more insights on the future of the stock going into 2023.
