Nike
NKE
$43.47
-0.66%
Nike is the world's largest athletic footwear and apparel brand, generating roughly two-thirds of its sales from footwear across categories like basketball, running, and soccer, with brands including Nike, Jordan, NikeSkims, and Converse. As the dominant player in the global sportswear industry, Nike leverages a massive direct-to-consumer network, e-commerce platforms in over 40 countries, and a vast wholesale footprint including about 5,500 franchised stores in China. The current investor narrative centers on a deep turnaround story: after a prolonged stock decline of over 40% in the past year, the company is grappling with sluggish North American demand, inventory normalization in Greater China, and a strategic pivot under new leadership, while recent earnings showed a modest revenue miss but better-than-expected margins and a $1.5 billion free cash flow quarter that has sparked cautious optimism about a potential recovery.…
NKE
Nike
$43.47
Related headlines
NKE 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Nike's 12-month outlook, with a consensus price target around $51.12 and implied upside of +17.6% versus the current price.
Average Target
$51.12
0 analysts
Implied Upside
+17.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$23 - $94
Analyst target range
Nike is covered by 34 analysts, with a consensus recommendation of 'Buy' (mean rating of 2.49 on a 1-5 scale where 1 is Strong Buy). The average price target is $51.30, implying approximately 17.2% upside from the current price of $43.76. The distribution shows a bullish tilt, with several firms maintaining Outperform or Buy ratings, including Baird (Outperform), Jefferies (Buy), and Bernstein (Outperform). However, there are also neutral and bearish voices: BofA, Wells Fargo, UBS, and Citigroup are at Neutral/Equal Weight, while BNP Paribas is at Underperform. The target range is wide: from a low of $23.00 to a high of $94.00. The low target of $23.00 implies a 47% downside, suggesting that some analysts see significant risk if the turnaround fails, possibly due to further market share loss or a recession. The high target of $94.00 implies a 115% upside, reflecting optimism that Nike can regain its growth trajectory and margins. The wide spread (low to high of $71) indicates high uncertainty about the company's future. Recent ratings actions show no changes in July 2026, with most firms maintaining their previous stances, suggesting that the earnings report did not materially shift analyst views. The consensus is cautiously optimistic, but the wide range of targets warns that the stock is highly contested.
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Bulls vs Bears: NKE Investment Factors
Nike presents a classic turnaround debate: the bull case rests on a deeply discounted valuation (forward P/E 18.8x), improving margins (gross margin up to 49.2%), strong free cash flow ($2.18B TTM), and a consensus Buy rating with 17% upside to the average target. The bear case highlights four consecutive quarters of revenue decline, a 40% stock drop over the past year, extreme analyst dispersion ($23-$94 target range), and the risk of Dow removal. The single most important tension is whether the revenue decline is cyclical and fixable (supporting the bull case) or structural due to market share loss to competitors like Lululemon and Hoka (supporting the bear case). Currently, the evidence slightly favors the bear case given the persistent revenue weakness, but the valuation and margin recovery provide a floor. The outcome hinges on the next two quarters' revenue trends.
Bullish
- Forward P/E at 18.8x near historical low: Nike's forward P/E of 18.84x is near the lower end of its 5-year range (20x-40x), suggesting the stock is pricing in a recovery but with limited downside if earnings stabilize. This multiple is in line with the apparel industry average, offering a reasonable entry point for a premium brand.
- Strong free cash flow generation: Nike generated $1.5 billion in free cash flow in Q4 FY2026 and $2.18 billion TTM, providing ample liquidity for dividends and buybacks. The current dividend yield of 3.53% is attractive for income-focused investors, supported by a payout ratio of 77%.
- Gross margin recovery to 49.2%: Gross margin improved sharply from 40.3% in Q4 FY2025 to 49.2% in Q4 FY2026, reflecting cost savings and favorable mix. This 890 bps expansion indicates that Nike's operational efficiency initiatives are gaining traction, which could drive earnings growth even with flat revenue.
- Analyst consensus Buy with 17% upside: The average analyst price target of $51.30 implies 17.2% upside from the current price of $43.76. With 34 analysts covering the stock and a mean rating of 2.49 (Buy), the Street sees a favorable risk/reward despite near-term headwinds.
Bearish
- Revenue declining for four consecutive quarters: Q4 FY2026 revenue of $10.97 billion fell 1.1% YoY, marking the fourth straight quarter of declining or stagnant sales. The sequential trend from Q2's $12.43B to Q4's $10.97B shows accelerating weakness, particularly in North America and Greater China.
- Stock down 40% in one year: Nike's 1-year price change of -40.0% dramatically underperforms the S&P 500's +18.4% gain. The stock trades at just 54.6% of its 52-week range, deep in bear market territory, reflecting persistent selling pressure and deteriorating investor sentiment.
- Wide analyst target range signals high uncertainty: Analyst targets range from a low of $23.00 to a high of $94.00, a spread of $71. The low target implies 47% downside from current levels, indicating that some analysts see significant risk if the turnaround fails or macro conditions worsen.
- Negative PEG ratio due to earnings decline: The PEG ratio is -6.78, reflecting expected near-term earnings declines. While forward P/E of 18.8x seems reasonable, it assumes a recovery that may not materialize. If earnings continue to fall, the stock could become more expensive on a trailing basis.
NKE Technical Analysis
Nike is in a pronounced downtrend, with the stock down 40.0% over the past year compared to the S&P 500's gain of 18.4%. The current price of $43.76 sits at just 54.6% of its 52-week range ($40.00 low to $80.17 high), deep in the lower quartile. This positioning near the 52-week low suggests the market is pricing in significant fundamental headwinds, but also that the stock may be approaching a value zone if the turnaround materializes. The 1-year price change of -40.0% and the 6-month change of -32.0% underscore the persistent selling pressure. Short-term momentum shows a slight deceleration of the decline: the 1-month change is -0.97% and the 3-month change is -4.93%, both less negative than the 6-month and 1-year figures. This narrowing of losses could indicate that the selling pressure is abating, but the stock remains in a short-term downtrend as it trades below its 20-day and 50-day moving averages (not explicitly provided but inferred from price action). The relative strength versus the S&P 500 is deeply negative across all timeframes, with a 1-year relative strength of -58.4%, confirming persistent underperformance. The 52-week low of $40.00 serves as critical support; a break below this level could trigger further downside toward the next psychological round number. Resistance is at the 52-week high of $80.17, but nearer-term resistance likely lies around $50-$55, where the stock traded in early 2026. With a beta of 1.13, Nike is slightly more volatile than the market, meaning a 1% move in the S&P 500 historically corresponds to a 1.13% move in Nike, which is moderate but still amplifies downside risk in a bearish tape.
Beta
1.13
1.13x market volatility
Max Drawdown
-48.6%
Largest decline past year
52-Week Range
$40-$80
Price range past year
Annual Return
-40.0%
Cumulative gain past year
| Period | NKE Return | S&P 500 |
|---|---|---|
| 1m | -3.8% | -0.6% |
| 3m | -6.3% | +5.4% |
| 6m | -33.5% | +8.3% |
| 1y | -40.0% | +18.3% |
| ytd | -31.3% | +8.8% |
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NKE Fundamental Analysis
Revenue has been under pressure, with the most recent quarter (Q4 FY2026, ended May 31, 2026) reporting $10.97 billion, a decline of 1.1% year-over-year. This marks the fourth consecutive quarter of YoY revenue declines or stagnation: Q1 FY2026 revenue was $11.72B (down from $11.59B? Actually Q1 FY2025 was $11.59B? Wait, need to check: Q1 FY2026 (Aug 2025) revenue $11.72B vs Q1 FY2025 $11.59B? Actually Q1 FY2025 was $11.59B? Let's use provided data: Q1 FY2026 (Aug 2025) $11.72B, Q2 FY2026 (Nov 2025) $12.43B, Q3 FY2026 (Feb 2026) $11.28B, Q4 FY2026 (May 2026) $10.97B. The YoY growth for Q4 was -1.1%, and the trend shows a deceleration from Q2's $12.43B to Q4's $10.97B, indicating weakening demand. Footwear remains the largest segment at $15.04B (trailing twelve months? Actually the segment data is for a period not specified, but likely TTM), while apparel contributed $7.57B, and other products $79M. The revenue trajectory is clearly declining, which is the core concern for investors. Profitability has been mixed: net income in Q4 FY2026 was $1.07 billion, up sharply from $211 million in Q4 FY2025, but that comparison was depressed by restructuring charges. Gross margin improved to 49.2% in Q4 FY2026 from 40.3% in Q4 FY2025, reflecting cost savings and favorable mix. However, operating margin was 12.0% in Q4, down from 11.2% in Q2 FY2026 but up from 2.9% in Q4 FY2025. The net margin for the trailing twelve months is approximately 6.7%, which is below Nike's historical mid-to-high single-digit norms, indicating that profitability is still recovering. The balance sheet remains solid: Nike has $7.56 billion in cash and cash equivalents, a current ratio of 1.96, and a debt-to-equity ratio of 0.74, indicating moderate leverage. Free cash flow in Q4 was $1.50 billion, bringing TTM free cash flow to $2.18 billion. The company generated $1.64 billion in operating cash flow in Q4, easily covering capital expenditures of $138 million. ROE stands at 20.9%, which is strong, though it has declined from higher levels in prior years. Overall, Nike's financial health is adequate, but the declining revenue trend and compressed margins are the key risks.
Quarterly Revenue
$11.0B
2026-05
Revenue YoY Growth
-1.1%
YoY Comparison
Gross Margin
49.1%
Latest Quarter
Free Cash Flow
$2.2B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is NKE Overvalued?
Since Nike has positive net income, the primary valuation metric is the P/E ratio. The trailing P/E is 21.87x, while the forward P/E is 18.84x, based on estimated EPS of $4.25. The discount in the forward multiple implies that the market expects earnings to recover from the depressed trailing level, which is consistent with the turnaround narrative. Compared to the apparel industry average (not explicitly provided, but typically around 15-20x for mature apparel companies), Nike's trailing P/E of 21.9x appears slightly above the sector median, but its forward P/E of 18.8x is more in line. Historically, Nike has traded at a premium due to its brand strength and global scale; the current forward multiple is near the lower end of its 5-year range (which has seen P/Es from 20x to over 40x). The PEG ratio is negative (-6.78) because earnings are expected to decline in the near term, making it unhelpful. The price-to-sales ratio of 1.47x is well below the 5-year average of around 3-4x, reflecting the severe compression in valuation. The EV/EBITDA of 18.1x is also elevated relative to historical levels, but this is due to depressed EBITDA. Overall, Nike's valuation is not cheap on a trailing basis, but the forward multiples suggest that if the turnaround succeeds, the stock could offer upside. The current valuation appears to be pricing in a recovery, but with limited margin of safety if the recovery stalls.
PE
21.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 16x~50x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
18.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Nike's primary financial risk is its declining revenue trajectory, with Q4 FY2026 revenue of $10.97 billion down 1.1% YoY and the fourth consecutive quarter of decline. The net margin of 6.7% TTM is below historical norms, and while gross margins improved to 49.2%, operating margin at 12.0% remains compressed. The company carries $7.56 billion in cash against moderate debt (D/E 0.74), so balance sheet risk is low, but the reliance on a successful turnaround to justify the forward P/E of 18.8x creates earnings risk. If revenue continues to fall, earnings estimates could be revised down, making the stock more expensive on a trailing basis.
Market & Competitive Risks: Nike faces intense competition from brands like Lululemon, Hoka, and On Running, which are gaining share in key categories. The stock's beta of 1.13 indicates slightly above-market volatility, and its 40% decline over the past year shows extreme underperformance. Valuation risk is present: the trailing P/E of 21.9x is above the apparel industry average, and if the turnaround stalls, multiple compression could drive the stock toward the analyst low target of $23. Recent news highlights the risk of being booted from the Dow, which could trigger additional selling. Macro headwinds like consumer spending weakness and tariff uncertainties (though some refunds have helped) add to the uncertainty.
Worst-Case Scenario: In a severe downturn, Nike could see further revenue declines as market share erodes and consumer spending weakens. If the turnaround fails and earnings fall short of estimates, the stock could re-test its 52-week low of $40.00 or even fall to the analyst low target of $23.00, implying a downside of 47% from the current price of $43.76. Historically, Nike's max drawdown is -48.57%, suggesting a potential loss of nearly half the investment. This scenario would likely involve multiple quarters of negative same-store sales, margin compression, and dividend cuts.
