Friday’s TLDR<\/h2>\n\n- Nike is in a turnaround<\/span><\/li>\n
- But the stock is down hard<\/span><\/li>\n
- The valuation is mixed<\/span><\/li>\n<\/ul>\n
What’s Happening?<\/span><\/h2>\nNike<\/a> remains a dominant player in global sportswear, leveraging its iconic brand, innovative products, and strong leadership. Despite its stature, the stock has struggled \u2014 down 22% this year and 67% off its November 2021 highs. The company is navigating inventory issues, shifting consumer tastes, and a poorly executed pivot to direct-to-consumer sales. Wholesale partners turned to competitors like Adidas and On<\/a>, putting further pressure on Nike\u2019s sales.<\/span><\/p>\nIn late 2024, Nike brought in veteran Elliott Hill as CEO, while investor Bill Ackman took a sizable stake via Pershing Square. Yet, while markets have rebounded from the 2022 bear market, Nike has not. The question now becomes: Is this a value trap or a turnaround story in progress?<\/span><\/p>\nTurnarounds Take Time<\/b><\/h4>\n
Nike still presents a compelling long-term opportunity, thanks to its global brand, strong margins, and history of dividend growth (now yielding about 2.75%). Hill is refocusing on core performance categories and rebuilding wholesale relationships. However, investors remain cautious about how soon these changes will drive growth.<\/span><\/p>\n![\"\"](\"https:\/\/www.etoro.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-20-115239.png\")
Nike\u2019s annual Dividends Per Share (DPS). Source: FinChat<\/em><\/figcaption><\/figure>\nNike is in the final quarter of its fiscal 2025 (which ends in May), a year where revenue and earnings are expected to fall by 11% and 42%, respectively. Fiscal 2026 (which starts in June) is projected to be about flat, with a return to growth in 2027. But markets are forward-looking \u2014 if Nike signals an earlier rebound, shares could react positively. If not, pressure may persist.<\/span><\/p>\nYou can view <\/span>Nike\u2019s financial picture right here<\/span><\/a>.\u00a0<\/span><\/p>\nPros and Cons<\/b><\/h4>\n
Nike’s strengths are clear: refreshed leadership, a strong brand, a history of increased dividend payments, and signs it’s moving past its rough patch. With the stock still down over 60% from its highs, value-oriented investors see potential.<\/span><\/p>\nBut risks remain. Nike is vulnerable to economic cycles, currency swings, and supply chain disruptions. Competition is intense, and growth in China \u2014 once a major driver \u2014 has slowed. Additionally, the ongoing trade war adds geopolitical uncertainty.<\/span><\/p>\nWant to receive these insights straight to your inbox?<\/strong><\/p>\nSign up here<\/a><\/p>\nThe Setup \u2014 NKE<\/span><\/h2>\nOn several valuation metrics, such as cash flow, Nike has gotten cheaper on a relative basis. However, because profits have been pressured, its earnings-based valuation hasn\u2019t become as cheap as some value hunters might have hoped. If profits begin to rebound more quickly though, this could help its valuation.\u00a0<\/span><\/p>\n
What’s Happening?<\/span><\/h2>\nNike<\/a> remains a dominant player in global sportswear, leveraging its iconic brand, innovative products, and strong leadership. Despite its stature, the stock has struggled \u2014 down 22% this year and 67% off its November 2021 highs. The company is navigating inventory issues, shifting consumer tastes, and a poorly executed pivot to direct-to-consumer sales. Wholesale partners turned to competitors like Adidas and On<\/a>, putting further pressure on Nike\u2019s sales.<\/span><\/p>\nIn late 2024, Nike brought in veteran Elliott Hill as CEO, while investor Bill Ackman took a sizable stake via Pershing Square. Yet, while markets have rebounded from the 2022 bear market, Nike has not. The question now becomes: Is this a value trap or a turnaround story in progress?<\/span><\/p>\nTurnarounds Take Time<\/b><\/h4>\n
Nike still presents a compelling long-term opportunity, thanks to its global brand, strong margins, and history of dividend growth (now yielding about 2.75%). Hill is refocusing on core performance categories and rebuilding wholesale relationships. However, investors remain cautious about how soon these changes will drive growth.<\/span><\/p>\nNike\u2019s annual Dividends Per Share (DPS). Source: FinChat<\/em><\/figcaption><\/figure>\nNike is in the final quarter of its fiscal 2025 (which ends in May), a year where revenue and earnings are expected to fall by 11% and 42%, respectively. Fiscal 2026 (which starts in June) is projected to be about flat, with a return to growth in 2027. But markets are forward-looking \u2014 if Nike signals an earlier rebound, shares could react positively. If not, pressure may persist.<\/span><\/p>\nYou can view <\/span>Nike\u2019s financial picture right here<\/span><\/a>.\u00a0<\/span><\/p>\nPros and Cons<\/b><\/h4>\n
Nike’s strengths are clear: refreshed leadership, a strong brand, a history of increased dividend payments, and signs it’s moving past its rough patch. With the stock still down over 60% from its highs, value-oriented investors see potential.<\/span><\/p>\nBut risks remain. Nike is vulnerable to economic cycles, currency swings, and supply chain disruptions. Competition is intense, and growth in China \u2014 once a major driver \u2014 has slowed. Additionally, the ongoing trade war adds geopolitical uncertainty.<\/span><\/p>\nWant to receive these insights straight to your inbox?<\/strong><\/p>\nSign up here<\/a><\/p>\nThe Setup \u2014 NKE<\/span><\/h2>\nOn several valuation metrics, such as cash flow, Nike has gotten cheaper on a relative basis. However, because profits have been pressured, its earnings-based valuation hasn\u2019t become as cheap as some value hunters might have hoped. If profits begin to rebound more quickly though, this could help its valuation.\u00a0<\/span><\/p>\n
In late 2024, Nike brought in veteran Elliott Hill as CEO, while investor Bill Ackman took a sizable stake via Pershing Square. Yet, while markets have rebounded from the 2022 bear market, Nike has not. The question now becomes: Is this a value trap or a turnaround story in progress?<\/span><\/p>\n Nike still presents a compelling long-term opportunity, thanks to its global brand, strong margins, and history of dividend growth (now yielding about 2.75%). Hill is refocusing on core performance categories and rebuilding wholesale relationships. However, investors remain cautious about how soon these changes will drive growth.<\/span><\/p>\n Nike is in the final quarter of its fiscal 2025 (which ends in May), a year where revenue and earnings are expected to fall by 11% and 42%, respectively. Fiscal 2026 (which starts in June) is projected to be about flat, with a return to growth in 2027. But markets are forward-looking \u2014 if Nike signals an earlier rebound, shares could react positively. If not, pressure may persist.<\/span><\/p>\n You can view <\/span>Nike\u2019s financial picture right here<\/span><\/a>.\u00a0<\/span><\/p>\n Nike’s strengths are clear: refreshed leadership, a strong brand, a history of increased dividend payments, and signs it’s moving past its rough patch. With the stock still down over 60% from its highs, value-oriented investors see potential.<\/span><\/p>\n But risks remain. Nike is vulnerable to economic cycles, currency swings, and supply chain disruptions. Competition is intense, and growth in China \u2014 once a major driver \u2014 has slowed. Additionally, the ongoing trade war adds geopolitical uncertainty.<\/span><\/p>\n Want to receive these insights straight to your inbox?<\/strong><\/p>\n Sign up here<\/a><\/p>\n On several valuation metrics, such as cash flow, Nike has gotten cheaper on a relative basis. However, because profits have been pressured, its earnings-based valuation hasn\u2019t become as cheap as some value hunters might have hoped. If profits begin to rebound more quickly though, this could help its valuation.\u00a0<\/span><\/p>\nTurnarounds Take Time<\/b><\/h4>\n
Pros and Cons<\/b><\/h4>\n
The Setup \u2014 NKE<\/span><\/h2>\n
![\"Weekly](\"https:\/\/www.etoro.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-20-115250.png\")