NKE arrives at its October 1 earnings with the most aggressive short-selling build in months — and, crucially, a lending market that has tightened meaningfully since the last note.
The short position has grown sharply. Since the September 23 note that flagged 78.8 million shares short at 6.6% of the free float, bears added a further 14.6 million shares in a single session on September 24, pushing SI to 94.7 million shares — now 8.0% of the free float. The one-week build is 29%, and the one-month increase is 54%. What has changed is the borrow picture. Availability has tightened from 621% to 546% — still technically in the "normal" zone, but down 16% in a week and now at its tightest level since September 1. Cost to borrow remains low at 0.53%, so there is no immediate squeeze pressure, but the direction of travel is clear: the lending pool is getting more crowded as shorts accumulate. The ORTEX short score has climbed to 50.2, up from 43.2 just ten days ago, reflecting the accelerating build.
The analyst community is decisively pessimistic heading into the print. B of A Securities made the starkest move on September 25, downgrading NKE to Underperform and slashing its target from $47 to $30 — below the current price of $35.75. The broader pattern from the prior week was similar: Oppenheimer, Barclays, UBS, Baird and Citigroup all cut targets, with Baird simultaneously downgrading from Outperform to Neutral and lowering its target from $70 to $44. The consensus mean target is $46.32, implying 30% upside on paper — but that figure is heavily distorted by the bulls who have yet to revise lower. The mean price target deserves skepticism given how rapidly the distribution is shifting. The stock has fallen 9.4% over the past month and is down roughly 44% year-to-date.
The bull and bear cases are genuinely in conflict. Bears point to structural headaches: market share losses to On Running (ONON) and Birkenstock (BIRK) — both of which gained 9-10% on the week as NKE added less than 1% — declining key markets, and an organizational reset that shows no clear timeline. ONON and BIRK are the most visible challengers: their week-on-week outperformance against Nike is visible in the peer data and underscores where the market is placing its conviction. Bulls hold that Nike's e-commerce rebuild, China exposure, and dominant basketball and running franchises remain intact long-term, and the EPS surprise factor score at the 99th percentile suggests the company has historically found ways to beat estimates even in difficult periods. Options positioning is nearly neutral — the put/call ratio at 0.73 is essentially flat to its 20-day average of 0.73, and the z-score is barely 0.06 — meaning the derivatives market is not pricing in unusual directional risk.
The October 1 print is therefore a test of whether NKE's management can demonstrate that the market share erosion is stabilizing, or whether the accelerating short build — now the largest in months — reflects a well-founded view that the recovery timeline is longer than even the cautious analysts have modeled.
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