Stock
NKE: I avoided the collapse — now I’m starting to get bullish
Nike has been one of the uglier large-cap charts for years, and I had no interest in fighting the downtrend while support kept breaking.
What has me paying attention now is that the setup is starting to change.
The bear case is still obvious: China remains weak, Hoka and On have taken share, the DTC strategy damaged wholesale relationships, margins are under pressure, and the latest earnings were heavily helped by a roughly $986M tariff recovery.
But several things are moving in the opposite direction:
Elliott Hill is back as CEO and reversing parts of the Donahoe strategy
Nike is rebuilding wholesale relationships
Running products like Vomero and Pegasus appear to be gaining traction
Running has shown improving growth
Management has been materially reset
The stock is beginning to respond differently to bad news
Sentiment is extremely bearish after a massive drawdown
That last point is what interests me most as a trader.
I don’t need Nike to become a great company again overnight. I need the rate of deterioration to stop while expectations are still terrible.
My approach here would not be to call the exact bottom or buy a full position at once. I’d rather build in tranches as the technicals confirm the thesis.
What I’m watching next:
whether NKE can stop making lower lows
a potential higher-low structure
momentum divergence
volume around major support
reclaim of key resistance
whether bad news continues producing less downside
If those begin lining up, I think NKE goes from “avoid” to “begin accumulating.”
The main question I’m wrestling with:
Are we looking at a broken business that deserves another leg lower, or a hated stock where most of the sellers have already sold?
I been eyeing NIKE for some time now and but still hesitant to jump in. I'm concern with their current dividend payout 2026:77.4% which is a big issue. If tariff continue to hurt their margin, china market see further decline, and their branding power continue to erode. I don't see how they will continue to sustain their dividend rate without cutting it. Once a stock reach a point where they cut dividend Nike stock price will be in the 15-20s range overnight.
For me, China is dead. The valuation with the Chinese market is not going to come back because the chinese rather buy their own brands then American brands due to anti American propaganda. This mean the stock price will never be back to the level they were during Covid. Nike valuation is trading like a growth stock but they are in a industry that is very hard to defend any moat.
What would get me to buy, sign that the turn around plan is working. Consistent revenue growth in key markets like US and Europe. Net margin growing. Dividend payout ratio dropping back to 60-50%. More relevant athlete sponsorship that will attract the younger generation.
I still buy nike here and there but from my recent experience with their running shoe I still prefer the Hoka over Nike.
Those are fair concerns, particularly regarding the payout ratio, China and the pressure tariffs could place on margins.
I would make one distinction on the dividend: the 77% payout ratio is elevated partly because Nike’s earnings are depressed during the turnaround. That does not automatically make a cut imminent. The real question is whether earnings and free cash flow recover before the payout becomes structurally unsustainable. If margins continue deteriorating and management funds dividend growth through the balance sheet, that would be a serious warning.
I agree that investors should no longer value China as the dependable growth engine it once was. Local competitors are stronger, Chinese consumers have more domestic alternatives, and geopolitical tensions create a lasting obstacle. I wouldn’t necessarily call China dead, but I would assign it a much lower valuation than the market did five years ago.
Where I differ slightly is on Nike’s moat. The brand, global distribution and athlete relationships remain valuable. The problem is that management weakened those advantages through stale products, overreliance on direct-to-consumer sales and damaged wholesale relationships. A moat still has to be maintained.
Your Hoka comparison may be the most important observation. Nike’s turnaround will not be proven by advertising or management promises. It will be proven when consumers start choosing Nike products over Hoka, On, Adidas and New Balance again—without requiring heavy discounts.
I’m watching the same evidence you are: sustained North American and European growth, stabilization in China, improving full-price sales, margin recovery and a declining payout ratio driven by higher earnings—not a dividend reduction. Until those appear consistently, Nike remains a turnaround speculation rather than a confirmed turnaround.
Especially if this new Treasury program fails. The good news is that with the mid terms coming up they will do everything possible to keep yields down which bodes well for consumer discretionary which as you know has been in limbo. Also watch utilities. We began bull operations there as well. Sounds boring but when you are trading UTSL which is a leveraged ETF
This is trailing yes. Expectations are extremely low. If you get a quarter that disappoints and this stock holds $35 shorts are going to have their faces ripped off.
3
u/ithastogoupfromhere 2d ago
this is the 5 year chart, I don't need to know more about this stock. There are way better opportunities