This blog has written about Nike many times since the stock started to fall from it’s $180 high in November ’21 to the $35 current market price today, and has owned the stock for clients as a “non-correlated” play in a long-term bull market, only to be flushed out of the stock several times to limit the downside risk.<\/p>\n
Today, only one long-term position of Nike is still owned, bought in 2004, with a cost basis of $8 per share.<\/p>\n
With that disclosure out of the way, the downgrade by Bank of America this week in front of the 10\/1\/26 scheduled earnings release, was not a vote of confidence in Nike’s soon-to-be-released quarter. Nike’s stock has been downgraded at least a half a dozen times since last reporting July 1 ’26, or had coverage initiated with neutral or cautious or lukewarm ratings as well. The bulls have completely disappeared on the prospects for a turnaround.<\/p>\n
Not all may be Nike’s fault since names like Decker’s and Onon, and Birkenstock as well as Dick’s were seeing 52-week lows in mid-September. Per one source, per the Dick’s Sporting Goods conference call in late August ’26, the athletic footwear market had become increasingly promotional.<\/p>\n
The numbers:\u00a0<\/strong><\/em><\/p>\n When Nike reports their fiscal Q1 ’27 after the closing bell on October 1 ’26, the analyst consensus is looking for $0.44 in earnings per share on $11.32 billion in revenue for expected y-o-y declines of -11% and -3% respectively. Nike’s operating income estimate is $822 million for an 11% y-o-y decline.<\/p>\n Last quarter – i.e. Q4 ’26 reported on July 1 ’26 – the tariff refunds boosted the numbers, particularly operating income, even though China revenue fell 11%, but North America revenue did rise 3% y-o-y. Elliott Hill has talked about the slow recovery in US footwear and some of the initiatives Nike is working on around footwear at the Austin, Texas, store. North America is 44% of Nike’s total revenue as of the May ’26 quarter, and all of the EBIT. China ‘s 12% of Nike’s latest revenue, but China carried much higher margins in the late part of last decade and earlier part of 2020’s, unlike today.<\/p>\n On the May ’26 quarterly conference call, per Morningstar, Nike did note that “trends slowed in the last half of fiscal Q4 ’26”.<\/p>\n Summary \/ Conclusion: <\/strong><\/em>If you look at the three pillars of long-term investing in common stocks, i.e. fundamentals, technicals and sentiment, none of these three factors give an investor any reason to own the stock. Although not shown in the above detail, Nike forward EPS and revenue estimates continue to decline, and in fact Nike expected revenue today is now lower than it was in 2023 and 2024. Yes, revenue has been declining, albeit slowly.<\/p>\n One fundamental positive that was just noticed on the spreadsheet, which goes back to the late 1990’s, is Nike’s current price-to-revenue is 1x, which is the cheapest that metric has ever been, at least in terms of this blog’s internal spreadsheet.<\/p>\n The lack of any stabilization in forward EPS and revenue estimates, is troublesome. Analysts just continue to cut numbers for forward years.<\/p>\n Something has to change for one of the world’s great brands, to dig itself out of this hole.<\/p>\n None of this is advice or a recommendation, but only an opinion. Past performance is no guarantee of future results. None of this information may be updated, and if updated, may not be done on a timely basis.<\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" This blog has written about Nike many times since the stock started to fall from it’s $180 high in November…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11],"tags":[],"class_list":["post-19922","post","type-post","status-publish","format-standard","hentry","category-nke"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/19922","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19922"}],"version-history":[{"count":5,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/19922\/revisions"}],"predecessor-version":[{"id":19927,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/19922\/revisions\/19927"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19922"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19922"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19922"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}