To The Moon

The Removal.

I have always associated $Nike(NKE)$ as one of those “it” or blue-chip stocks because of its most popular and best-selling lifestyle and streetwear series - the Nike Air Force 1.

Besides that, the Nike Pegasus stands as its longest-running & most popular performance running franchise.

And how could we forget its other massive multi-decade bestsellers include the Air Max and Air Jordan series.

Therefore, it came as a surprise when I came across the news print that NKE will be removed from the S&P 100 index’s listing before US trading opens on Mon, 21 Sep 2026. (see below)

This comes as part of S&P 500 and Dow Jones Indices’ quarterly rebalance announced on 04 Sep 2026.

NKE will be replaced by $Palo Alto Networks(PANW)$.

At the same time, $Dell Technologies Inc.(DELL)$, $SanDisk Corp.(SNDK)$ and Arista Networks(ANET) will also enter the index; while Honeywell Aerospace (HONA), Simon Property Group (SPG) and Colgate-Palmolive (CL) will make way for the new entrants.

Note: This is a change in index membership, not a delisting. NKE remains in the S&P 500 and the Dow and its shares continue to be traded on the NYSE stock exchange.

The symbolic message is that NKE no longer represents the mega‑cap tier of 100 largest US companies by market value, not that it is uninvestable.

Forced selling from the index change appears modest in mechanical terms.

The largest visible S&P 100 tracker ($iShares S&P 100 ETF(OEF)$ ) held about $19.6 million of NKE (about 0.10% of its $20.45 billion assets), equivalent to around 2.5% of a typical day’s NKE trading volume.

History : From $179 to $38 !

NKE’s share price peaked at an intraday high of $179.10 on 5 Nov 2021.

As of Fri, 04 Sep 2026, the stock closed at $38.40, a decline of -78.6% from that peak. (see below)

Along with that, its market cap also fell from about $281 billion to roughly $56.9 billion.

NKE has been trading near its 52‑week low around $37.95–$38.40, which some commentators describe as a 12‑year low in price terms.

The drawdown reflects both (a) earnings deterioration and (b) collapse in valuation multiple.

At its 2021 peak, NKE traded at about 50× FY21 diluted EPS of $3.56.

Cue to Tue, 08 Sep 2026, at $38.40 it trades near 24× FY26 underlying EPS of $1.58 (excluding a one‑time tariff recovery).

Meaning, investors now pay less than half the old multiple for less than half the earnings power - a double whammy, really !

Fall Factors.

So, what have transpired between 2021 to 2026, a mere short 4+ years ?

Below are some worthy mentions:

(1) Direct‑to‑consumer (DTC) overreach:

• NKE previously de‑emphasized wholesale partners to push its own stores and digital channels, but execution faltered as specialist retailers remained critical for discovery and comparison.

• By FY 2026, NKE’s direct revenue was down by -6% (digital was down by -12%), while wholesale grew +6.0% as the company rebuilt retail relationships.

(2) Product mix & Innovation gap:

• Performance categories (notably “running” shoes) have improved, with Running posting 5 consecutive quarters of double‑digit growth and adding about $1 billion in revenue.

• However, Sportswear & Jordan Streetwear that accounts for roughly ½ of NKE’s total revenue, are expected to stay negative in FY 2027.

• This created a “fast boat, slow ocean” problem where strong niches cannot offset broad lifestyle weakness.

(3) China’s structural slowdown:

Greater China revenue fell from $8.29 billion in FY 2021 to $5.85 billion in FY 2026.

It has fallen nearly -30% over 5 years, with FY 2026 down -13% currency‑neutral and Q4 down -17%.

Local Chinese brands (eg. Anta, Li‑Ning) and global performance challengers (eg. On, Hoka) have eroded NKE’s relevance.

Trade tensions created by Trump’s wrong tariff move have compounded the issue and fueled a “Buy China” sentiment in the process.

(4) Brand & Channel dynamics:

• Giant retailers like Dick’s Sporting Goods are stuck with excess shoes, showing that NKE sneakers are not selling well. As a result, retailers may give NKE less shelf space.

• NKE’s popularity is fading as interest in the NBA slips, with buyers grow tired of older Jordan lines. Meanwhile, its competitors are making specialized shoes for running, walking, and work are stealing market share.

Worth Buying Still ?

At $38.40 per share, NKE’s $1.63 per share (FY 2026) dividend works out to be a yield above 4%, but it consumed 78% of reported EPS and over 100% of underlying EPS in FY 2026.

While $9.0 billion in cash versus $7.9 billion in debt gives NKE enough liquidity to maintain (a) dividend payout, (b) sustainable dividend growth and (c) buybacks require margin recovery.

The valuation looks cheaper than its 2021 peak, but it is not obviously cheap on depressed earnings.

The P/E ratio is about 18× on reported FY 2026 EPS of $2.10, but closer to 24× on underlying EPS of $1.58. actually.

For rational investors, the investment case hinges on whether NKE can:

• Restore full‑price demand.

• Stabilize Sportswear/Jordan.

• Turn China sales revenue around.

Key indicators to watch and use as a guage include :

• Currency‑neutral revenue growth.

• Gross margin expansion without one‑time benefits.

• Full‑price sell‑through.

• Sportswear/Jordan trends.

• China digital/wholesale performance, inventory discipline.

• Free cash flow (FCF) coverage of the dividend.

Technical analysis: 12‑month SMA, MACD, RSI

I’ll now compute Nike’s 20‑day, 50‑day, and 200‑day simple moving averages (SMAs), MACD (12,26,9), and 14‑day RSI using the past 12 months of daily prices, then interpret the signals.

As of Wed, 09 Sep 2026

Technical Analysis.

Naturally, deferring to latest techical analysis of (a) Simple Moving Average, (b) MACD and (c) RSI will provide an insight into NKE’s possible trajectory and time an entry (if interested).

(a) Simple Moving Averages (SMAs)

On Wed, 09 Sep 2026 - NKE ended the day at $37.35 per share, lower than its 3 SMAs of (a) 20-day ($39.43), (b) 50-day ($41.37) and (c) 200-day ($51.17).

It signals a strong, multi-timeframe bearish trajectory, indicating NKE is experiencing severe downward momentum across short-, medium-, and long-term horizons.

As of Wednesday, the 50‑day remains below the 200‑day, a “death cross” pattern that formed in November 2025 and has not been resolved, signaling that the long‑term trend is still bearish.

(b) MACD.

Both MACD line (-1.02) and the Signal line (-0.92) are below the Zero line, confirm the prevailing downtrend and that short‑term momentum is negative.

With the MACD line below the Signal line, momentum is still skewed to the downside.

With Divergence at -0.10, it indicates that NKE short-term moving average is trading below its longer-term signal line, signaling bearish momentum.

(c) RSI

With its 14-day RSI at 35.58, it suggests weak momentum without extreme oversold conditions. It leaves room for further downside before a classic mean‑reversion bounce becomes statistically more likely.

Investment Conclusion:

NKE’s S&P 100 exit is the market’s verdict on 5 years of strategic missteps, not a catalyst that created them.

The stock’s -79% fall from its 2021 peak reflects both shattered earnings power and a halved valuation multiple, leaving a famous brand priced as a fragile turnaround.

Technically, NKE remains in a deep downtrend with price below all key moving averages, negative MACD momentum, and an RSI that signals weakness without extreme oversold conditions.

Fundamentally, the path to recovery is plausible but narrow: running and wholesale are improving, yet China, Sportswear, Jordan and margins must all turn before the current 24× underlying earnings multiple looks justified.

NKE is not yet a clear buy; it is a watchlist candidate where patience for confirmed demand & margin recovery may be rewarded more reliably than contrarian bottom‑fishing. Agree ?

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