Nike (NKE) closed at $39.09 on Monday, Aug. 17, down about 4% on the day and the lowest close the stock has recorded since 2014. Anyone who bought shares at any point in the intervening 12 years is now flat or underwater on price. Shares rebounded on Tuesday morning, trading around $40.38 by late morning in New York. By Friday afternoon, it hadn't changed all that much at $40.79. But as the stock continually creeps lower, it is hitting lows not seen in over a decade.
The close is also a small embarrassment for the most bearish call on the street, in the sense that it beat it. Roughly two weeks earlier, JPMorgan analyst Matthew Boss had downgraded Nike to “Underweight” from “Neutral” and cut his price target to $40 from $47, arguing that the turnaround decisions taken in 2026 would hurt profits before they helped them. The stock reached his target, and then went through it, within a fortnight. The 36 analysts covering the name still average a $49.88 target and a consensus rating of “Moderate Buy,” which is not exactly a death knell but also not a strong sign of support.
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NKE Stock Still Has Room to… Fall
Here is the part almost nobody writes, and it is the reason a 12-year low is not automatically an opportunity. At Monday's close, Nike traded at 18.6 times trailing earnings and 22.8 times forward earnings. A forward multiple higher than a trailing multiple is the market saying, in arithmetic, that it expects profits to fall. Backing out the numbers: trailing earnings per share of $2.10 against a forward multiple of 22.8 implies consensus forward earnings near $1.71 a share, a decline of roughly 18%. The price has gone back 12 years. The expected earnings have not finished going backward.
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What is actually broken is mostly one region. Nike's China business has shrunk about 30% since 2021, and its annual China revenue finished May at its lowest level in eight years after eight consecutive quarters of declining sales there. This is not a new diagnosis. Barchart was asking whether it was time to give up on the stock over exactly this combination of China weakness and margin pressure well before the 12-year low arrived.
The company's response is a large distribution gamble. Nike is pulling online sales rights from some of its biggest Chinese retail partners and moving that business onto its own site and app plus flagship stores on Tmall, JD.com, and Douyin, starting in January. The logic is pricing power: fewer partners discounting the brand means a healthier full-price business later. The cost is immediate, and JPMorgan put the near-term revenue hole at about $1 billion a year. Analysts elsewhere have called the plan risky and extreme, which is a fair description of switching off revenue you already have.
The scale of what has been undone is easy to lose in a share price. Nike's market capitalization is now roughly $59.9 billion across about 1.48 billion shares. Reporting around Monday's move put the stock roughly 78% below its 2021 record and the destroyed market value at more than $200 billion, figures consistent with the current capitalization, though the exact number depends on which day you take as the 2021 high and on the buybacks that have shrunk the share count since.
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Dividend Case Still Strong
The fair counterweight to a price-only story is the dividend, and at these levels it has become the most interesting thing about the stock. Nike declared a quarterly dividend of $0.41 on Aug. 6, an annualized $1.64, which at Monday's close works out above 4%… a yield this company has not offered in the modern era of its share price. A holder from 2014 is flat on price and is not flat on total return, because 12 years of a rising dividend sit underneath that flat line. The price of a round trip is real; a zero return is not.
It is also worth being precise about what has and has not deteriorated. Revenue for fiscal 2026 came in at $46.4 billion, essentially flat against the prior year's $46.31 billion, and net income was $3.11 billion, down about 3.5%. The numbers are clear: While the business is under pressure, it is not falling apart. What has collapsed is the multiple the market is willing to pay for it, and some of that is competitive: Barchart has written before that Lululemon (LULU) shareholders can partly blame Nike for pressure in the category, and the traffic Nike lost has gone to rivals who intend to keep it.
The things that would have to change are unglamorous and measurable: China sales turning positive rather than less negative, direct-to-consumer absorbing what the wholesale partners were doing, and forward estimates stopping their slide so the forward multiple falls below the trailing one instead of sitting above it. Nike next reports on Sept. 29.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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