Dow stock Nike is 'priced to perfection' ahead of Thursday's earnings report, strategist says

Nike is set to report quarterly earnings Thursday after the bell, and one strategist is cautious on the stock heading into the company’s results.

“The stock is trading near its 52-week highs, but it’s really priced to perfection and actually remains incredibly expensive,” Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management, told CNBC’s “Trading Nation” on Wednesday.

Ahead of the report, here are Schlossberg’s biggest points to watch.

• Nike shares, up 14 percent this year, are trading at 67 times trailing earnings and 26 times forward earnings, though its five-year growth rate is only about 7.5 percent. In that way, Nike is a mature consumer goods company priced as a breakout brand.

• Investors will be watching for the impact of a weakened euro on its business. Europe accounts for only about 17 percent of Nike’s business, but if there is a big decline due to exchange rates and general malaise across European markets, Nike’s margins could be negatively impacted.

• The World Cup may be providing a short-term boost to Nike’s stock, but it’s doubtful it can overcome broad macroeconomic headwinds the company is facing.

Bottom line: Nike’s shares have been on a tear in recent months, but appear “priced to perfection” ahead of the company’s earnings report.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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