Key Stats for Nike Stock
- Current Price: $34.36
- Target Price (Mid): ~$98
- Street Target: ~$38
- Potential Total Return: ~186%
- Annualized IRR: ~25% / year
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What Happened?
Nike (NKE) expects to earn less per share in fiscal 2027 than it pays in dividends. Guidance calls for adjusted EPS of $1.15 to $1.35, against a $0.41 quarterly dividend worth $1.64 a year. Shares closed at $34.36 on October 7, 2026, for a 4.8% dividend yield. That was one session after Berenberg cut the stock to Sell with a $27.50 target. CFO David Denton says Nike can keep the payout and eventually grow it. Nike’s investor relations materials and TIKR data show how much room that pledge has.
The Payout Already Outran Normalized Earnings
At the guided range, the dividend equals roughly 121% to 143% of adjusted EPS, and that range already excludes about $0.15 per share of restructuring costs. TIKR’s trailing payout ratio of 78.4% looks safer only because trailing GAAP EPS of $2.09 includes a Q4 fiscal 2026 GAAP EPS of $0.72 against adjusted EPS of $0.20. On normalized EPS, fiscal 2026 already paid out more than it earned: $1.63 in dividends against $1.58.
Cash is tighter still. At 1,485.31 million shares, the dividend costs about $2.4 billion a year, while fiscal 2026 free cash flow was $2.18 billion. Q1 fiscal 2027 free cash flow was negative $64 million while Nike paid roughly $610 million in dividends. Q1 was also weak a year earlier, at positive $15 million (TIKR).
On the October 1 call, Evercore ISI analyst Michael Binetti put the payout ratio above 100%. Denton, Nike’s Executive Vice President and Chief Financial Officer, answered that “under all scenarios, we have support for maintaining and ultimately growing the dividend over time.” That is a statement of intent, not a declared raise. It also comes in a year when management expects EBIT to fall faster than revenue.
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$8.4 Billion of Cash Buys Time While Estimates Keep Falling
Nike ended Q1 with $8.4 billion in cash and short-term investments, about three and a half years of dividends at today’s rate. TIKR shows LTM net debt at 0.46x EBITDA. Consensus free cash flow of about $2.7 billion in fiscal 2027 and $2.6 billion in fiscal 2028 would cover the payout, with little to spare.
Those cash flow estimates rest on revenue forecasts that are still falling. Fiscal 2028 consensus revenue fell 6.52% to $43.76 billion between September 30 and October 8, per TIKR. Denton said guidance assumes China “actually gets worse” for the rest of the year. He also declined to give specific gross margin guidance, a silence Berenberg flagged as a significant risk. At around 25x NTM P/E, Nike still trades above adidas (ADS) at 14x and On Holding (ONON) at 18x.
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TIKR Advanced Model Analysis
- Current Price: $34.36
- Target Price (Mid): ~$98
- Potential Total Return: ~186%
- Annualized IRR: ~25% / year
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The TIKR model’s mid case points to around $98 by May 31, 2031, from $34.36 today. That date closes the fiscal 2031 window for Nike’s Pace savings plan.
The mid case’s inputs use around 5% annual revenue growth and around 9% net income margin. Consensus implies only about 2.5% yearly revenue growth from fiscal 2026 to 2031, so the model is more optimistic on sales. The main risk is that free cash flow follows revenue estimates lower and leaves the dividend funded from the balance sheet.
On the upside, the mid case sits nearly three times above today’s price. On the downside, the Street’s $38.15 mean target is only about 11% above the close, and Berenberg’s $27.50 sits below it.
Conclusion
Nike’s last declaration, for the January 2, 2026, payment, raised the quarterly dividend 3% to $0.41. A hold at $0.41 would signal that fiscal 2028 free cash flow, not the pledge, now sets the payout. A raise would need that cash flow above about $2.4 billion to stay covered.
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So what is Nike stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
