Nike Stock Has Fared Better than Its Sportswear Peers

A look at Nike’s stock market performance

After being the worst-performing Dow stock in 2016, Nike (NKE) has delivered an above-average performance so far in 2017.

The company has risen 8.5% YTD (year-to-date), outperforming the broader S&P 500 Index’s (SPX) YTD return of 5.3% and the S&P 500 Apparel and Accessories Index’s YTD return of -3% as of April 6, 2017.

Nike Stock Has Fared Better than Its Sportswear Peers

The company has also done better than its sportswear rivals Under Armour (UAA) and Lululemon Athletica (LULU), which have fallen 30% and 22%, respectively, YTD. While Nike recently delivered its 19th straight quarterly earnings beat, Lululemon and Under Armour disappointed investors by missing consensus estimates in their most recent quarters.

Though Nike outdid analysts’ earnings expectations in its most recent quarter, it failed to please investors in several metrics. A miss on revenue expectations, a fall in future orders, and a gloomy outlook for fiscal 4Q17 disappointed NKE’s investors and led to a 7% fall in the company’s stock price the day after it reported its fiscal 3Q17 results on March 21, 2017.

Nike continues to be a Wall Street darling

Nike continues to be the favorite sportswear stock on Wall Street. The company is rated a 2.1 on a scale of 1 (strong buy) to 5 (sell) compared to 2.4 for Lululemon, 2.8 for Under Armour, and 2.2 for Columbia Sportswear (COLM).

The company has received the lowest number of “sell” ratings among its peers. Only 3% of analysts recommend selling Nike, compared to 6% for LULU, 5% for Columbia Sportswear, and 18% for Under Armour. However, footwear manufacturer Foot Locker (FL) has no “sell” ratings.

Nike is trading ~10% below its 52-week high. Wall Street, on average, expects the company’s stock price to touch $62.36. This level indicates an upside of ~13% over the next 12 months.

ETF investors seeking to add exposure to NKE can consider the SPDR Dow Jones Industrial Average ETF (DIA) (DJIA), which invests 1.9% of its portfolio in the stock.