NEW YORK (TheStreet) --Nike (NKE) - Get Reportis set to report its fiscal 2017 first-quarter earnings after the bell this afternoon. Analysts are forecasting for earnings of 56 cents per share and revenue of $8.88 billion.
In preparation for the Beaverton, OR-based athletic apparel manufacture's results, Tuesday afternoon's "Fast Money Halftime Report" panel on CNBC discussed Nike stock.
Having bought calls today, Najarian Family and Advisors Office co-founder Jon Najarian explained why investors think a move to the upside is coming for the stock.
"They were aggressively buying calls yesterday, the double-nickel $55 calls, today they're buying $56 calls. They're also selling $56.50 calls in the ones expiring this week. They're also trading off a lot of puts. They think Nike more or less moves to the upside perhaps not explodes," he explained.
Najarian Family and Advisors Office co-founder Pete Najarian says the story with Nike revolves around competition with Adidas (ADDY) and its valuation.
"It's an Adidas fight as well. The other problem is the transition from being a growth company in a value company, and yet you look at the valuation and its mid-20s, and if you go forward, it's about 20. It's a little expensive, so the stock is probably fairly priced right now," he noted.
TIAA Global Asset Management managing director Stephanie Link added that she wants to like Nike, believes they have strong leadership, management, and are a global brand. However, the valuation is the problem.
"Twenty-five forward estimates, but you're talking about 6% revenue growth. North America futures are probably running about mid-single digits, maybe upper-single digits, that's a pretty lofty valuation for what you're getting," she said.
Shares of Nike were higher in mid-afternoon trading on Tuesday.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Rating team rates Nike as a Buy with a ratings score of B+. This is driven by multiple strengths, which it believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks it covers. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. The team feels its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: NKE