Nike is out with its fiscal third-quarter earnings after the bell Thursday.
The company emerged as an e-commerce powerhouse during the pandemic, posting 84% digital sales growth in its most recently reported second quarter, ended November.
After a 110% run in a year, the stock is at a “key technical juncture,” Miller Tabak chief market strategist Matt Maley said.
“The stock is expensive on a P/E basis, price to earnings, and also price to sales, more importantly. However, I’ve got to admit on a technical basis it does have some potential here,” Maley told CNBC’s “Trading Nation” on Thursday.
He highlighted $147 as a critical level, a price point it has bumped up against four times. He said this earnings report could prove the catalyst that pushes it above that resistance level.
“Even though the stock is not oversold, it’s kind of in a neutral area, maybe slightly above, but it’s not overbought and certainly not as overbought as it has been at recent highs in the last couple of years. So it’s kind of at a key technical juncture right now. A break above $147 and it’ll run, but wait, just wait for that,” said Maley.
Shares traded just above $143 on Thursday.
Nancy Tengler, chief investment officer at Laffer Tengler Investments, sees Nike as well positioned in two opportunity areas — consumer strength and a digital boom.
“It’s in the sweet spot of where robust consumer, well-heeled consumer meets digital. So, we’ll be watching closely,” Tengler said during the same interview.
Even so, she is wary of its high valuation.
“It’s a bit lofty at a multiple of 47 times 2021 earnings, and a relative price-to-sales ratio near historic highs,” she said. “On pullbacks, it becomes more interesting, but I wouldn’t be chasing it here.”
Shares have risen nearly 140% off a 52-week low set last March. Its rise has slowed down this year, though — it is up just over 1% this year, below the S&P 500’s 5% gain.
