Key Takeaways
- Nike stock is down 32% over the past year after a run of weak reports. The last one, on Oct. 1, guided fiscal 2027 revenue down by a high-single-digit percentage when Wall Street expected about 2%.
- The past month’s rebound came as investors moved money into beaten-down consumer stocks, and Truist downgraded Nike to Sell on Nov. 5, saying the business itself hasn’t improved.
- At about 30x forward earnings, close to its five-year average, the stock already assumes a recovery that analysts are still cutting.
- Investor Day on Nov. 16 and 17 has to put a date on a return to double-digit margins before the stock looks like a buy.
Nike (NKE) stock is still down 32% over the past year, the worst showing of any stock in the Dow in 2026. A 15% rebound over the past month has made up only part of that. The business still has to prove it has stopped shrinking.
Nike’s Investor Day on Nov. 16 and 17 is its next chance.
A year of reports that kept getting worse
The stock lost that ground one earnings report at a time. Greater China’s revenue fell 16%, 10%, 17% and then 26% on a currency-neutral basis over its last four reported quarters. Meanwhile, management pushed the turnaround further out with each report.
The worst came on Oct. 1. Nike guided revenue for fiscal 2027 (the year to May) down by a high-single-digit percentage, when Wall Street had expected about a 2% decline. In the first quarter, Greater China fell 26% and Converse 28%. Nike Direct fell 8% as digital sales dropped 13%, even as North America grew.
Gross margin did rise 60 basis points to 42.8%. Nike also announced Pace, a cost program targeting $2.5 billion of savings through fiscal 2031, with the bulk landing in fiscal 2029 and 2030. S&P cut Nike’s credit rating to A on Oct. 5. The next day, Berenberg’s downgrade to Sell sent the stock to a 13-year low.
TIKR tracks 42 analysts on Nike. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Nike, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Nike’s Analyst Ratings
The bounce came from the sector
Most of the past month’s rebound came with no Nike news behind it. Investors rotated out of tech into beaten-down consumer stocks in mid-October. Then an early-November rally in the Dow lifted Deckers, Lululemon and Under Armour along with Nike.
Truist downgraded Nike to Sell on Nov. 5 with a $29 target, saying the rally came from that rotation and the business itself hasn’t improved. Barclays is on the other side: it raised its target to $45 on Oct. 22 and called the shares “near bottom.” But even Barclays warned that fiscal 2028 estimates “may need an expected sales haircut.”
Priced for a recovery that hasn’t started
Analysts expect earnings to bottom this fiscal year and climb back only slowly:
At $1.28 this year and $1.55 in fiscal 2028, Nike would still earn well under half of fiscal 2024’s $3.95. And this year’s consensus fell 25% in the 90 days to late October, so the cuts haven’t stopped.
Yet the stock is priced as if they have. The rally has pushed Nike’s forward P/E back to 30x, right around its five-year average of 31x:
That’s an ordinary multiple on depressed earnings. And the Street’s $36 average target sits below today’s price.
What Investor Day has to show
Margins are what management has to fix. Nike’s EBIT margin ran between 11.6% and 16.2% from fiscal 2021 to fiscal 2024, then fell to 8.0% in fiscal 2025:
Analysts expect just 5.7% this fiscal year and 7.0% in fiscal 2028. So when management lays out its five-year outlook on Nov. 16 and 17, investors need a date for getting back to double digits. They also need a figure for how much of Pace’s savings reaches profit.
The dividend depends on it, too. In fiscal 2026, free cash flow came to $2.2 billion, short of the $2.4 billion Nike paid out in dividends. We’ll learn from the next dividend decision whether its 24-year streak of raises keeps going (last year’s raise came on Nov. 20).
Investor Day can mark the bottom only if management puts a date on double-digit margins there. Until then, buyers are paying an average multiple for earnings that are still falling, and I’d wait for that date before buying. Of course, second-quarter results in mid-December will also show us whether China and Nike’s own stores have stopped shrinking.
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 of the stocks mentioned. Thank you for reading, and happy investing!
