Nike guides lower sales and $1.25 in adjusted earnings while China, Jordan and digital reset extends past 2027. At 28 times trough earnings, I see 16% downside to $29.
Key points
- $1.25 a share is the midpoint of fiscal 2027 adjusted earnings guidance after revenue is seen down high single digits.
- Down 22% in China and 28% at Converse shows the reset is concentrated where traffic and inventory are weakest.
- About $1.0 billion in Pace charges through 2031 buys only $2.5 billion of cumulative savings before reinvestment.
The call
The market still prices a quick rebound. At $34.71 a share Nike trades near 28 times trough earnings. Fiscal 2027 adjusted guidance centers on $1.25 a share.
Quarterly revenue reset extends into FY27 ($ billions)SEC XBRL and 10-Q to Aug 31 2026; later bars are mine per FY27 guide. As of Oct 8 2026.
Recovery will take longer and cost more cash. Performance running is growing but Sportswear at half of sales, Jordan at 13% and China need multiple seasons of cleanup. Dividend of $1.64 a share exceeds recent free cash flow while debt comes due.
Earnings per share cut by two thirds in three years ($)SEC filings to May 31 2026 and Oct 1 2026 guide; FY27 is adjusted EPS. As of Oct 8 2026.
Valuation
| Driver to target | Figure |
|---|
| Fiscal 2027 sales, down 8% | $42.7 billion |
| Fiscal 2027 adjusted earnings per share | $1.25 |
| Fiscal 2028 earnings per share, mine | $1.45 |
| Target multiple on trough recovery earnings | 20 times |
| Twelve month target | $29.00 a share |
Twenty times reflects a strong brand (a name that supports pricing) with no growth, mid 20% tax and restructuring risk. Downside of 16% plus a 4.7% yield still favors a sell. A proven brand limits the multiple from falling further.
Risks
- China worsens as guided and wholesale partners cut orders, which you would see in monthly channel sales and inventory growth.
- Digital cleanup and Jordan launch cuts destroy more volume than pricing recovers, which you would see in units and discounts.
- Cash consumption forces borrowing or a dividend rethink, which you would see in operating cash flow and rating actions.
What would change my mind
Stabilizing China sell-through with full-price wholesale reorders and positive quarterly free cash flow would point to an earlier earnings trough.