Trim 70-80% into $38-$40 resistance zone; retain 20-30% stub with $33.80 hard stop
SELL is the calibrated synthesis where the directional conviction stands but the trim magnitude (70-80%) honors the binding 9/14 lesson demanding "70%+ trim or full Sell" for confirmed bear fundamentals, while the 20-30% residual honors the 9/11 lesson preserving a small position at major support with 12-year-low sentiment readings rather than 100% exit. The Aggressive Analyst's full liquidation overweights execution risk and binary Oct 1 outcome; the trader's 30-50% trim repeats the exact failure mode that bled alpha three weeks ago. The 4.43% yield provides cushion but is not a thesis; until 3+ of 5 recovery conditions are met post-earnings, the trend is the enemy.
| Position | Action |
|---|---|
| Price reaches $38-$40 resistance zone | Trim 70-80% of NKE exposure in tranches |
| Price reaches $33.80 stop-loss level | Exit entire position (hard stop) |
| $38-$40 zone not reached within 8-10 trading sessions | Execute at least first tranche at market |
| Post Oct 1 earnings - bull case (revenue flat/+, GM ≥46%, China stabilizing) | Upgrade to Overweight, target $48-50, add above $40.90 |
| Post Oct 1 earnings - bear case (revenue < -8%, GM <43%, dividend softens) | Exit residual to zero, target $28-32 |
| Maintain 20-30% residual | Preserve carry and earnings optionality with defined-risk stub |
NIKE's Q4 FY2026 margin inflection (900bps gross margin expansion, 5x EPS growth) signals the trough is behind it; combined with fortress balance sheet metrics ($379M net debt, $9.03B cash, 22.1% ROE) and a 4.4% dividend yield at 15.8x forward P/E (vs historical 25-30x), the stock offers a re-rating opportunity where any positive margin confirmation mechanically expands multiple from 15.8x toward 20x+.
| Indicator | Value | Signal |
|---|---|---|
| 10 EMA | $37.44 | bearish |
| 50 SMA | $40.52 | bearish |
| 200 SMA | $49.70 | bearish |
| RSI(14) | 33.41 | bearish |
| MACD | -1.097 | bearish |
| MACD Signal | -0.966 | bearish |
| MACD Histogram | -0.13 | neutral |
| Bollinger Lower Band | $35.93 | bearish |
| Bollinger Middle Band | $38.47 | neutral |
| Bollinger Upper Band | $41.02 | neutral |
| ATR(14) |
This report is AI-generated for informational and educational purposes only and is not investment advice or a recommendation to buy or sell any security. Full disclaimer.
Balance sheet is a fortress with no distress mechanism for bear-case downside
EV: comfortably positive from $36 (asymmetric table: +$15 (30-35%), +$5 (40%), -$5 (20-25%), -$13 (5-10%)) · concedes: Revenue base is plateaued (conceded); RSI at 33.4 is not formal oversold (threshold is 30) — conceded by bear counter; Hoka and On are taking share in specific performance-running niches — conceded; December 2025 gap-down (108.6M shares) and April 2026 gap-down (114.2M shares) were major breakdown prints — these are behind us but were real; Brand moats don't get rebuilt in a single quarter — duration of turnaround is uncertain
NKE's Q4 margin "inflection" is a cleanup print on a shrinking revenue base, not a turnaround; the balance sheet prevents insolvency but not decline; forward estimates will be cut; and the setup into Oct 1 earnings has negative skew with multiple uncorrelated catalysts for further downside.
EV: -$1.50 from $36 (bear's revised expected value table); target $30–$32 over 1–2 quarters · concedes: Q4 margin print looks impressive on a screen; Balance sheet is genuinely pristine; Net debt of $379M, $9B in liquid assets, 22% ROE, current ratio of 1.96x is real; The 4.43% yield is genuine; Jordan and NBA/NFL aren't going anywhere (competitive moat in core); MACD histogram being less negative is technically accurate observation
→ vs conservative: Quality-at-a-discount thesis is dangerous cognitive bias; elite ROE on declining revenue is a melting ice cube, not a value signal; Q4 margin expansion was cleanup cost, not steady-state; dividend at 90% of FCF is propped by balance sheet, not earnings power; competitive landscape shows category-wide pressure that turnaround CEO cannot solve in six months
→ vs neutral: Waiting for confirmation is paralysis not prudence; RSI at 33.4 shows no bullish divergence so momentum has more room to bleed; by time confirmation arrives, bear case at 23 is base case; price already below every major moving average with MACD making fresh local lows
| $0.98 |
| neutral |
Support: 35.93 · 34 | Resistance: 37.44 · 38.47 · 40 · 40.52 · 41.02
NIKE is in a textbook multi-timeframe bearish configuration with price below all moving averages (10 EMA $37.44, 50 SMA $40.52, 200 SMA $49.70), all MAs sloping downward, and MACD negative at -1.097 making new lows. RSI at 33.41 is approaching oversold but not yet at the 30 threshold, and critically there is no bullish divergence as price makes new lows while RSI is not deeply oversold. Price is riding the Bollinger lower band ($35.93), indicating strong short-term bearish pressure. ATR has compressed to $0.98 from $1.48 mid-July, suggesting orderly selling rather than panic. Key resistance sits at $38–$40 zone (10 EMA to 50 SMA), and support at $35.93 (lower band) and $34 (psychological level). The final recommendation is SELL for existing longs without stops and AVOID for new long entries, as no reversal confirmations (RSI reclaiming 50, MACD crossover, price reclaiming 50 SMA, or 10 EMA flattening) are present.
Market Cap
$53.7B
Stock Price (Implied)
~$36.22
52-Week High
$76.97
52-Week Low
$36.17
50-Day Average
$41.02
200-Day Average
$50.79
P/E (TTM)
17.25x
Forward P/E
15.83x
PEG Ratio
1.44
P/B
3.61x
Dividend Yield
4.43%
Beta
1.11
Gross Margin (TTM)
43.2%
Operating Margin (TTM)
12.7%
Net Profit Margin (TTM)
6.7%
ROE
22.1%
ROA
7.0%
EBITDA (TTM)
$4.93B
Cash & Equivalents
$7.56B
Short-Term Investments
$1.46B
Total Liquid Assets
$9.03B
Total Debt
$11.03B
Net Debt
$0.38B
Inventory
$7.50B
Receivables
$5.93B
Total Current Assets
$24.60B
Total Assets
$38.41B
Total Liabilities
$23.55B
Stockholders' Equity
$14.87B
Current Ratio
1.96x
Working Capital
$12.06B
Debt/Equity
74.3%
Operating Cash Flow (FY2026)
$2.87B
CapEx (FY2026)
$0.68B
Free Cash Flow (FY2026)
$2.18B
Free Cash Flow (Q4'26)
$1.50B
FCF (TTM)
$1.89B
Dividends Paid (FY2026)
$2.41B
Buybacks (FY2026)
$0.15B
Dividend Coverage (FCF/Payout)
0.91x
Revenue (FY2023)
$51.22B
Revenue (FY2024)
$51.36B
Revenue (FY2025)
$46.31B
Revenue (FY2026)
$46.40B
Gross Margin (FY2023)
43.5%
Gross Margin (FY2024)
44.6%
Gross Margin (FY2025)
42.7%
Gross Margin (FY2026)
42.9%
Net Income (FY2023)
$5.07B
Net Income (FY2024)
$5.70B
Net Income (FY2025)
$3.22B
Net Income (FY2026)
$3.11B
Diluted EPS (FY2023)
$3.23
Diluted EPS (FY2024)
$3.73
Diluted EPS (FY2025)
$2.16
Diluted EPS (FY2026)
$2.10
Revenue (Q4'25)
$11.10B
Revenue (Q1'26)
$11.72B
Revenue (Q2'26)
$12.43B
Revenue (Q3'26)
$11.28B
Revenue (Q4'26)
$10.97B
Gross Margin (Q4'25)
40.2%
Gross Margin (Q1'26)
42.2%
Gross Margin (Q2'26)
40.6%
Gross Margin (Q3'26)
40.2%
Gross Margin (Q4'26)
49.2%
Operating Margin (Q4'25)
2.9%
Operating Margin (Q1'26)
7.9%
Operating Margin (Q2'26)
8.1%
Operating Margin (Q3'26)
4.9%
Operating Margin (Q4'26)
11.9%
Net Income (Q4'25)
$0.21B
Net Income (Q1'26)
$0.73B
Net Income (Q2'26)
$0.79B
Net Income (Q3'26)
$0.52B
Net Income (Q4'26)
$1.07B
Diluted EPS (Q4'25)
$0.14
Diluted EPS (Q1'26)
$0.49
Diluted EPS (Q2'26)
$0.53
Diluted EPS (Q3'26)
$0.35
Diluted EPS (Q4'26)
$0.72
Revenue CAGR (FY24→FY26)
-5.0%
Net Income CAGR (FY24→FY26)
-26.0%
EPS CAGR (FY24→FY26)
-24.4%
Revenue YoY (Q4'26)
-1.1%
Gross Margin YoY (Q4'26)
+900 bps
Operating Income YoY (Q4'26)
+308%
EPS YoY (Q4'26)
+414%
Cost of Revenue (FY2026)
$26.49B
Selling & Marketing (FY2026)
$4.75B
G&A (FY2026)
$11.36B
Total Operating Expenses (FY2026)
$16.11B
vs 52-Week High
-53%
vs 200-Day MA
-29%
vs 50-Day MA
-12%
Strengths
Concerns
NIKE is a high-quality franchise in a cyclical/structural transition, trading near its 52-week low ($36.22) at a significant discount to historical valuation. The Q4 FY2026 results provided the first convincing evidence of a margin-driven turnaround—gross margin expanded 900 bps to 49.2% and EPS grew 5x year-over-year—but revenue stabilization or growth is required to confirm a sustained re-rating. With a fortress balance sheet (near-zero net debt), elite ROE of 22.1%, and an attractive 4.43% dividend yield, the downside is partially cushioned, making this an attractive candidate for patient, value-oriented buyers awaiting confirmation of top-line recovery.
Macro: 10-year Treasury yield touching 2007 highs — direct headwind for high-multiple consumer discretionary like NKE. Fed funds futures imply 94% probability of NO rate cuts in 2026 (higher-for-longer regime compresses P/E multiples). US recession odds rising to 15% (+7.5pp week-over-week per Polymarket), historically bad for discretionary athletic footwear demand. Oil prices spiking — raises input costs (synthetic rubber, EVA foam, freight) and pressures consumer real disposable income. Recession odds rising sharply (+7.5pp in a week) further pressures discretionary spending.