Can Nike Stock Recover If Markets Fall?
Nike (NKE) stock is down 10.5% in a day. The recent slide reflects renewed concerns around weak guidance, slowing China sales, and shrinking margins, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Nike stands today.
- Size: Nike is a $87 Bil company with $46 Bil in revenue currently trading at $58.71.
- Fundamentals: Last 12 month revenue growth of -7.1% and operating margin of 7.4%.
- Liquidity: Has Debt to Equity ratio of 0.13 and Cash to Assets ratio of 0.23
- Valuation: Nike stock is currently trading at P/E multiple of 29.9 and P/EBIT multiple of 25.3
- Has returned (median) 69.3% within a year following sharp dips since 2010. See NKE Dip Buy Analysis.
These metrics point to a Weak operational performance, alongside High valuation – making the stock Unattractive. For details, see Buy or Sell NKE Stock
That brings us to the key consideration for investors worried about this fall: how resilient is NKE stock if markets turn south? This is where our downturn resilience framework comes in. Suppose NKE stock falls another 20-30% to $41 – can investors comfortably hold on? Turns out, the stock saw an impact slightly better than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- NKE stock fell 53.2% from a high of $177.51 on 5 November 2021 to $83.12 on 30 September 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $129.50 on 1 February 2023 , and currently trades at $58.71
| NKE | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -53.2% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- NKE stock fell 40.0% from a high of $104.58 on 21 January 2020 to $62.80 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 10 August 2020
| NKE | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -40.0% | -33.9% |
| Time to Full Recovery | 140 days | 148 days |
2018 Correction
- NKE stock fell 21.1% from a high of $85.55 on 21 September 2018 to $67.53 on 20 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 26 February 2019
| NKE | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -21.1% | -19.8% |
| Time to Full Recovery | 68 days | 120 days |
2008 Global Financial Crisis
- NKE stock fell 45.0% from a high of $35.03 on 5 June 2008 to $19.29 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 15 March 2010
| NKE | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -45.0% | -56.8% |
| Time to Full Recovery | 371 days | 1,480 days |
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