Nike's (NKE, $98.04) job cuts to cost $200 million to $250 million

Nike is planning job cuts that is estimated to lead to $200 million to $250 million in one-time employee termination costs, as the company focuses on a strategy shift.

The athletic clothing and footwear company had announced in June a new strategy in its e-commerce push called the Consumer Direct Acceleration, amid conronavirus pandemic-induced consumer shift from brick and mortar stores to online shopping.

While Nike did not specify the number of job cuts, it did say the online push was “expected to lead to a net loss of jobs across the company," resulting in the one-time charge.

Last quarter, Nike’s e-commerce sales grew +75% even as overall revenue fell.

Tickeron analysis shows that NKE's price moved above its 50-day Moving Average on July 21, 2020

This price move indicates a change in the trend, and may be a buy signal for investors. In 34 of 42 cases where NKE's price crossed above its 50-day Moving Average, its price rose further within the subsequent month. The odds of a continued Uptrend are 81%.

Current price $98.04 crossed the resistance line at $99.57 and is trading between $99.57 resistance and $93.44 support lines. Throughout the month of 06/18/20 - 07/21/20, the price experienced a -0.09% Downtrend, while the week of 07/14/20 - 07/21/20 shows a +2% Uptrend.

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Indicator suggests the ticker price trend may be in a reversal from a Downtrend to an Uptrend. 33 of 53 cases where NKE's Stochastic Indicator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued Uptrend are 62%.

The Momentum Indicator exceeded the 0 level on July 21, 2020. Traders may consider buying the ticker or exploring call options. In 50 of 77 cases where the ticker's Momentum Indicator exceeded 0, its price rose further within the subsequent month. The odds of a continued Uptrend are 65%.

The 50-day Moving Average crossing above its 200-day Moving Average indicates a buy signal, due to the trend repositioning higher. In 1 of 3 cases where NKE's 50-day Moving Average crossed above its 200-day Moving Average, its price rose further within the subsequent month. The odds of a continued Uptrend are 33%.

Fundamental Analysis (Ratings)

Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 70%. During the last month, the daily ratio of advancing to declining volumes was 1.1 to 1.

The Tickeron PE Growth Rating for this company is 13 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating rating for this company is 27 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 93, placing this stock better than average.

The Tickeron SMR rating for this company is 35 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Price Growth Rating for this company is 48 (best 1 - 100 worst), indicating steady price growth. NKE’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Valuation Rating of 92 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: NKE's P/B Ratio (17.06) is slightly higher than the industry average of (1.48). NKE's P/E Ratio (62.28) is considerably higher than the industry average of (19.82). Projected Growth (PEG Ratio) (7.07) is also within normal values, averaging (40.09). Dividend Yield (0.97) settles around the average of (0.87) among similar stocks. NKE's P/S Ratio (4.10) is very high in comparison to the industry average of (0.84).