Can Nike Continue This Bullish Run?

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E = Earnings Are Increasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Nike’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Nike look like and more importantly, how did the markets like these numbers?

2012 Q4

2012 Q3

2012 Q2

2012 Q1

Earnings Growth (Y-O-Y)

58.33%

-16%

-9.56%

-4.88%

Revenue Growth (Y-O-Y)

9.39%

7.37%

9.67%

18.71%

Earnings Reaction

11.06%

6.16%

-1.12%

-9.39%

Nike has seen increasing earnings and revenue growth for most of the last four quarters. From these figures, the markets have become increasingly more pleased with Nike’s last earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has Nike stock done relative to its peers, Crocs (NASDAQ:CROX), Deckers Outdoor (NASDAQ:DECK), Skechers USA (NYSE:SKX) and sector?

Nike

Crocs

Deckers Outdoor

Skechers USA

Sector

Year-to-Date Return

15.35%

3.72%

46.25%

17.92%

9.73%

Year-to-date, Nike has been an average performer relative to its strong peers and sector.

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Conclusion

Nike operates a well recognized brand worldwide and provides products perceived as top quality by consumers and businesses across the globe. The stock has been on a monster run over the last few years and is now trading at all-time high prices on support by strong earnings and revenue growth. Relative to its peers and sector, Nike has been an average performer in a high performing area of the stock market. Look for Nike to continue to OUTPERFORM.

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