Nike Inc., (NYSE: NKE) stock is currently trading at $54.42 per share, down 1.32% of $0.73. The stock peaked at $60.22 on 24 August 2016, but has been on a relentless decline since then. It has shed $5.86 in just over 1 month, with further losses expected. At current prices, the company has a market capitalisation of $91.39 billion. The price/earnings ratio is a respectable 25.22, and the dividend is $0.64, with a yield of 1.16%.

The next earnings date for Nike is Tuesday, 27 September 2016.

The 52-week trading range for the stock is $51.48 on the low end and $68.19 on the high end. The current price is barely $3 above the 1-year low.

What about Actual Earnings versus Estimates?

For Q3 2016, the estimated earnings are $0.56 per share. The actual earnings will be revealed this week. For Q2 2016, the actual earnings were $0.49 and the estimated earnings were $0.48. In Q1 2016, the actual earnings were reported at $0.55 and the estimated earnings at $0.49. For Q4 2015, the actual earnings were $0.45 and the estimated earnings $0.43. In Q3 2015, the actual earnings were $0.67 and the estimated earnings $0.60 – yet another positive earnings surprise for the company. If we evaluate Nike Inc., in terms of revenues versus earnings, some interesting trends are evident.

• In 2016, revenues of $32.38 billion were reported with earnings of $3.76 billion.
• In 2015, revenues of $30.6 billion were reported with earnings of $3.27 billion.
• In 2014, revenues of $27.8 billion were reported with earnings of $2.69 billion.

In terms of recommendation trends, Nike Inc. has become decidedly less bullish since June 2016. Of the 32 analysts polled in June (Yahoo! poll), 15 rated Nike as a buy with 9 rating it as a strong buy, and 8 as a hold. By September 2016, 8 analysts rated it as a strong buy, 12 as a buy and 10 as a hold. On a recommendation scale of 1.0 (strong buy) to 5.0 (sell), Nike Inc., is at 2.1. The average price target for the stock is $65.44 per share with a current price of $54.47 per share.

What about Upgrades and Downgrades?

In 2016, Nike Inc. has been downgraded 5 times by major financial institutions. The following upgrades/downgrades have been reported:

• On 10 May 2016, Wells Fargo downgraded Nike to a market perform status from an outperform status.
• On 1 June 2016, Morgan Stanley downgraded Nike from an overweight status to an equal weight status.
• On 1 June 2016, Bank of America Merrill Lynch downgraded Nike to a neutral status from a buy rating.
• On 26 August 2016, B Riley & Company downgraded Nike to a neutral rating from a buy rating.
• On 8 September 2016, Piper Jaffray downgraded Nike to a neutral rating from an overweight rating.

Clearly, the bullish indicator on the rating scale is not consistent with the downgrade history of the stock by major banks and financial institutions, and the current trends in the stock price.

What Should Traders Be Looking for in Nike’s Upcoming Earnings Reports?

The earnings report for Nike Inc. will cover Q1 of the first fiscal quarter on Tuesday at the close of trading. Market analysts are growing increasingly concerned about the growth prospects of Nike Inc., given that Adidas AG (ADDYY) and Under Armour Inc. (UA), are strengthening in terms of market share. By the close of trading on Friday, 23 September, Nike shares were 0.2% lower. According to analysts from FactSet, Nike EPS is expected to come in at $0.56, down $0.11 year on year. Additionally, analysts are anticipating an increase in revenues year on year, from $8.41 billion in 2015 to $8.88 billion in 2016. But it should be remembered that for the year-to-date, Nike Inc. is down approximately 12%, while the Dow Jones is up 5%.