Nike’s quarterly earnings are out Thursday afternoon. How the stock usually trades after results

Published Thu, Jun 24 202111:24 AM EDTUpdated Thu, Jun 24 20212:29 PM EDT

Jesse Pound @/in/jesse-pound @jesserpound

Nike 's stock has been in a slump in recent months, but Thursday's earnings report offers an opportunity for the company to convince investors to jump back in. The apparel stock has been disappointing this year, falling nearly 6% in part due to a controversy in China that appeared to take a bite out of demand. The S & P 500, meanwhile, has gained more than 13%. Nike is set to report its fiscal fourth-quarter results after the bell on Thursday. Here's a look at what Wall Street is expecting from the event and how the stock usually reacts. Earnings estimates for Nike this quarter have dipped slightly in recent months and now stand at 51 cents per share, according to FactSet. The estimates have also dipped for future quarters, so a beat on Thursday could lead to upward revisions from analysts. Nike usually beats analysts' expectations, and its share price typically rises in the following session. However, the fourth-quarter report tends to be one of its weakest, including earnings misses for the previous two fiscal fourth-quarter reports. Historically, the company has beaten earnings expectations 63% of the time and had its stock rise after 58% of fourth-quarter reports, according to data from Bespoke Investment Group. Overall, Nike has beaten earnings expectations 90% of the time with a resulting gain in stock price after 63% of reports, according to Bespoke. Shares have also been volatile after this earnings report in recent years. After posting a surprise loss for this quarter last year, the stock fell more than 7% the next day. On the other hand, the stock rose more than 11% following a fourth-quarter earnings beat in 2018. Even with declining estimates and a muddled history for the June report, Wall Street analysts are generally bullish on Nike. According to FactSet, 87% of analysts have a buy rating on the stock. Stifel analyst Jim Duffy, who has a buy rating for the stock and expects Nike to post 61 cents in earnings per share, said in a note to clients on Monday that he expects the company's guidance to beat expectations as well. "We see our above-consensus F4Q21 sales and earnings target as within reach, and expect FY22 guidance calls for [low double-digit] sales growth and gross margin expansion that tops the analyst day model of +50bps annually on average," the note said. Duffy did trim his earnings projections earlier in the quarter, citing supply chain issues and demand weakness in China. Baird analyst Jonathan Komp, who has an outperform rating on the stock, has penciled in just 48 cents in earnings per share for the quarter but thinks there is upside going forward. "Despite near-term uncertainties within China (Pou Sheng monthly sales still running down > 10% year-over-year), we think the bar for NKE has been lowered significantly in recent months, as buyside expectations have come down faster and further than sell-side consensus," Komp said in a note to clients on Monday. Nike was trading at roughly $133.45 per share on Thursday, which represents upside of about 22% to FactSet's average analyst price target of $163.34 per share. —CNBC's Michael Bloom contributed to this report.

The Nike logo is seen on the Nike store on February 22, 2021 in New York City.

John Smith | Corbis News | Getty Images

Nike's stock has been in a slump in recent months, but Thursday's earnings report offers an opportunity for the company to convince investors to jump back in.

The apparel stock has been disappointing this year, falling nearly 6% in part due to a controversy in China that appeared to take a bite out of demand. The S&P 500, meanwhile, has gained more than 13%.

Nike is set to report its fiscal fourth-quarter results after the bell on Thursday. Here's a look at what Wall Street is expecting from the event and how the stock usually reacts.