Nike Inc. (NKE) stock is currently trading at $53.30 per share, up 0.11% in the pre-market trading session, or $0.06. The stock closed out the day on Monday, 23 January 2017 at $53.24 per share. Nike Inc. is on a gradual uptrend, as indicated by the above chart. Over the past 1 month, the stock has appreciated by 3.80%, and over the past 3 months the stock is up 2.64%. The current price is above the 50-day moving average of $51.67, but beneath the 200-day moving average of $54.38. Let’s examine what factors are affecting Nike Inc. stock, and how binary options traders can benefit from them.
Nike’s competition got the wind knocked out of them
Nike Inc. is an industry leader in sporting wear – clothing and footwear. One of Nike’s biggest competitors – Under Armour (UA) – recently got sucker-punched by a major investment bank. Nomura came out swinging against Under Armour after the company posted lacklustre sales in its latest quarter. The sportswear company was subject to scathing criticism after its slowdown in sales. Investors naturally reacted to the downgrade come after Nomura affirmed that the company will likely not be growing as quickly or profitably as it has in recent quarters. Morgan Stanley was quick to point out that Under Armour growth projections were bleak. There is evidence that Under Armor is struggling to hit its targets, after massive discounts at the company’s outlet stores and weakness in its basketball shoe sales during the December holidays. Naturally, Nike Inc. can pick up the slack and benefit from investment downgrades to its competition.
As a binary option trader, you will want to keep your eyes on the guidance issued by analysts on Nike and its competition.
Why did Nike Perform so Badly in 2016?
During 2016, Nike Inc. stock declined by 20%. What’s more, this industry leader was also at the back of the pack on the Dow Jones Industrial Average. There are several reasons why Nike Inc. slacked off, notably the strong performance of Adidas, and the rapid growth of Under Armour. During the course of the year, Nike’s revenues amounted to $8.18 billion, exceeding the consensus forecast among analysts by $90 million. Year on year, that represents a growth of 6.4%. But it was the cash on hand on the balance sheet that really had investors concerned. Nike’s balance sheet reflected $5.9 billion, down $173 million from December 31, 2015. So much of the performance of the stock was based on forecasts not meeting actual data. This doesn’t mean that Nike Inc. didn’t perform well – it did. Consider an important statistic for this company: Statista believes that the company’s market share will rise to 27.2% worldwide by the end of 2017. That’s an uptick from its current global footwear market share of 22.8%.
