Key Takeaways
- Nike (NKE) stock is up 15% in the past month, coming back from a near 13-year low while tech stocks sold off.
- The bounce came from investors moving into beaten-down consumer stocks and from Barclays’ higher price target, but Nike didn’t change its guidance for lower sales and earnings in fiscal 2027.
- Barclays raised its target by using a higher multiple, with its earnings estimates unchanged, and consensus still expects fiscal 2027 EPS more than 30% below fiscal 2026’s.
- At about 30x forward earnings, I’d wait for Investor Day on Nov. 16-17 to put a date on a return to growth before buying.
Nike stock is up 15% in the past month. It has climbed off the near 13-year low it hit the day after its fiscal Q1 report.
That’s a solid run in a month when the Nasdaq 100 fell more than 7%. But nothing in Nike’s business changed over the stretch. Its guidance is the same, and Wall Street hasn’t raised its earnings estimates.
The bounce started at a 13-year low
On Oct. 1, Nike guided revenue for fiscal 2027 (the year ending May 2027) down by a high-single-digit percentage, with adjusted EPS of $1.15 to $1.35. That range leaves out about $0.15 of charges for Pace, its new cost program.
Pace targets about $2.5 billion of cumulative savings through fiscal 2031, and most of that lands in fiscal 2029 and 2030.
The stock closed at a near 13-year low the next day. Then S&P cut Nike’s credit rating to A on Oct. 5, Berenberg downgraded the stock to Sell on Oct. 6, and Moody’s moved its outlook to negative on Oct. 15.
Money left tech, and Nike caught it
Moody’s call came the same day Nike shares jumped, as investors rotated out of tech and into beaten-down consumer names.
Nike’s own market-moving news was thinner. On Oct. 28 it unveiled its first running shoe designed for India.
That’s a long-term bet, made while Greater China revenue fell 26% currency-neutral last quarter. I wouldn’t expect it to show up in this year’s numbers.
TIKR tracks 44 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
Barclays bought the reset, and Wolfe didn’t
On Oct. 22, Barclays analyst Adrienne Yih met with management, then raised her target to $45 from $37 and kept an Overweight rating, saying the shares are “near bottom.”
The evening before, Wolfe Research initiated coverage at Underperform with a $28 target.
Yih got to $45 by applying a higher multiple, leaving her earnings estimates unchanged. Barclays also thinks the shares will trade sideways until Nike makes its path back to growth clearer.
It said fiscal 2028 estimates “may need an expected sales haircut.”
Consensus already has earnings falling for a third straight year in fiscal 2027:
The $1.28 analysts expect is inside Nike’s guidance and about 19% below fiscal 2026.
Even fiscal 2029’s $1.94 is less than half of what Nike earned in fiscal 2024. And nothing this month gave analysts a reason to raise those numbers.
At 30x, I’d wait for Investor Day
Nike trades at about 30x forward earnings, close to its five-year average of 31x:
That’s an ordinary multiple on earnings that are still shrinking.
The Street’s average target has more than halved over the past year, to $36.50, and is now below where the stock trades:
Guided EPS is also below the $1.64 annual dividend, which CFO Dave Denton has pledged to keep paying.
Bottom line: Barclays may be right that most of the selling is done. But at 30x earnings that are still falling, I’d want Nike to put a date on a return to growth before buying.
Nike gets its chance at Investor Day on Nov. 16-17, where Denton has promised a financial algorithm for the next five years.
A margin target and a date for sales to grow again would back Barclays. After that, the first check on the plan is the fiscal Q2 report in December, which carries a headwind of about 400 basis points that management has already flagged.
So what is Nike stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Nike could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
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!
