{"id":19947,"date":"2026-10-05T13:11:06","date_gmt":"2026-10-05T19:11:06","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=19947"},"modified":"2026-10-05T13:11:06","modified_gmt":"2026-10-05T19:11:06","slug":"market-breadth-perspective-and-avoid-nike-after-the-guidedown","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=19947","title":{"rendered":"Market Breadth Perspective and Avoid Nike After the Guidedown"},"content":{"rendered":"

\"\"<\/a><\/p>\n

This first chart on market breadth is from Walter Deemer, an experienced Wall Street hand who posts regularly on X, on market breadth. This was a post from last week.<\/p>\n

\"\"<\/a><\/p>\n

This second set of charts from the weekly Bespoke Report published last Friday night, October 2nd, and also talks about the deteriorating market breadth situation.<\/p>\n

If you read the Bespoke commentary within the above chart, it does note that the SP 500 cap-weighted index is just 1% from an all-time-high, (actually the Nasdaq 100 made a new all-time-high last Friday October 2nd and again today, Monday October 5th) so the AI trade remains intact, while the rest of the SP 500 suffers greatly.<\/p>\n

There are a lot of stats thrown around constantly in the financial media, and I thought I read that the “average stock” in the SP 500 was down 16% in Q3 ’26.<\/p>\n

While bad breadth should always give one pause, the experience in the last 1990’s – in particular 1995 to 1999, and the 25% average return the SP 500 delivered in those years – the fact was “market breadth” looked as bad back then, as it does today, and that lasted for 5 years.<\/p>\n

Market breadth for me is like the discussions around blood pressure, the “silent killer”. It eventually catches up to you, but it may take years to kill you.<\/p>\n

Nike – the guidedown was terrible – avoid the stock for now:<\/strong><\/em><\/p>\n

Just a short note to close the loop on Nike (NKE), the sportswear and athletic shoe titan that has lost it’s way in a truly magnificent fashion.<\/p>\n

Last week’s fiscal q1 ’27 earnings release was an unmitigated disaster with the shoe giant guiding revenue lower by high-single-digits for the year. The EPS guide, which one analyst at Morningstar put at a $1.25 midpoint, versus their own $1.69 estimate, was a 26% decline from the October 1 estimates.<\/p>\n

That’s ugly for a stock that is down to $32 – $33 per share from the $180 high in November ’21.<\/p>\n

Nike EPS estimate revisions:\u00a0<\/strong><\/em><\/p>\n

\"\"<\/a><\/p>\n

Readers should focus on fiscal ’27, ’28 and ’29, and then look at the gradual lowering of EPS estimate for those calendar years.<\/p>\n

Really, fiscal ’27 is the only fiscal year that matters, since Elliott Hill HAS to fix this sinking ship in the next 12 months, or there won’t be much left to salvage.<\/p>\n

Look at the reduction in the fiscal ’27 EPS estimate in just the last week, and then look since 12\/31\/25. The current EPS estimate is 40% lower than just 9 months ago.<\/p>\n

Nike revenue estimate revisions:\u00a0<\/strong><\/em><\/p>\n

\"\"<\/a><\/p>\n

Again, focus on fiscal ’27’s deteriorating annual revenue estimate.<\/p>\n

The one fundamental positive for Nike is that with last week’s earnings release and price decline, Nike is officially trading at 0.90x trailing-twelve-month revenue, after trading at 3x – 4x revenue several years ago.<\/p>\n

Looking at the history of EPS estimates and the expected growth rates, just 6 quarters ago the Street was expecting Nike to generate 49% EPS growth for fiscal ’27, while today the expected EPS growth rate for fiscal ’27 is now -11%.<\/p>\n

Nike’s dividend is now 115% of the NKE’s free-cash-flow, but the company looks to have some room to issue debt.<\/p>\n

This blog’s earnings preview<\/a> written on Nike last week pre-earnings, warned readers about the continued downward trade in EPS and revenue revisions for Nike. Nike was down 44.91% YTD as of last Friday, October 2nd’s market close.<\/p>\n

Summary \/ conclusion: <\/strong><\/em>Bad breadth always comes home to roost, but as the above-example cited, it can sometimes take a while. Nike’s fiscal ’27 guide-down is a short throw away from the wheels coming off the cart completely.<\/p>\n

Hopefully the dividend isn’t cut or eliminated.<\/p>\n

No need to read “War & Peace” tonight. Keeping it short for additional articles.<\/p>\n

None of this is advice or a recommendation, but only an opinion. Past performance is no guarantee of future results. All the EPS and revenue data in this article is sourced from LSEG. None of this information may be updated, and if updated, may not be done in a timely fashion.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

This first chart on market breadth is from Walter Deemer, an experienced Wall Street hand who posts regularly on X,…<\/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":[199,11],"tags":[],"class_list":["post-19947","post","type-post","status-publish","format-standard","hentry","category-market-breadth","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\/19947","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=19947"}],"version-history":[{"count":7,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/19947\/revisions"}],"predecessor-version":[{"id":19958,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/19947\/revisions\/19958"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}