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Why Kevin Durant can't help Nike

Nike is once again signing Oklahoma City Thunder forward Kevin Durant for a multiyear shoe deal estimated to be worth as much as $350 million.

That sounds like a lot of money, but consider this: Durant's Nike KD shoes brought in $175 million in 2013 alone. What's more, Nike was able to keep Durant from going over to rival Under Armour.

Given that Nike's shares are flat in 2014 while Under Armour's stock is up 63 percent year-to-date, any win against the relatively young upstart is a good thing. But for Paul Swinand, equity analyst at Morningstar, Nike may still be expensive regardless.

"The P/E (price-to-earnings multiple) is about 26 times," Swinandsaid. "I've got it a little overvalued on my list."

However, Nike does have some things going for it, namely a return on capital averaging 24 percent over the past five years, according to data compiled by FactSet.

"They're one of the highest return-on-capital companies in our coverage list," Swinand said. "We like the business. We like the company [but] the stock is a little rich right now."

For those looking to trade Nike's stock, however, Richard Ross, global technical strategist at Auerbach Grayson, suggests one way to do so. Though share prices are approaching what he sees as short-term resistance at $80, Ross' long-term chart shows a bullish ascending triangle pattern.

"It suggests that if we do break above that $80 level, that we could have as much as $10 of upside from $80," said Ross, a "Talking Numbers" contributor. "Keep in mind that 50-week moving average down around $76, that's going to be your protective stop on the trade. With the shares around $79 [Tuesday], that's about $3 of downside, $10 of upside from current levels. I like those odds. I would take a chance on Nike here."

To see the full discussion on Nike, with Swinand on the fundamentals and Ross on the technicals, watch the above video from CNBC's "Street Signs."

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