NKE enters the final stretch before its June 25 earnings in an unusual position: a cluster of insiders buying aggressively near multi-year lows, while the Street's analyst community has spent the past six weeks cutting ratings and targets in near-unison. The stock closed Tuesday at $42.42, down 7.8% over the past month and roughly 33% year-to-date, leaving it deep in turnaround territory.
The insider buying is the most striking data point this week. Four buyers stepped in between April 7 and April 13 — CEO Elliott Hill put just under $1 million to work at $42.27, while Lead Independent Director Tim Cook (the Apple CEO) spent $1.06 million at $42.43. Director Bob Swan added $500k at $42.44, and fellow director John Rogers bought $173k at $43.34. Net insider activity over the past 90 days totals roughly $3.6 million in purchases against only modest prior-period sales from legal and HR staff. The concentration of C-suite and board-level buying at prices almost identical to today's close is notable. It doesn't guarantee a floor, but it does show that people with the most information about Nike's trajectory were willing to buy at these levels.
The short-side setup, however, tells a distinctly different story from the insider-buying narrative. Short interest has actually been declining: SI as a percentage of the free float has dropped from nearly 5% in mid-April to 4.1% today, a 17% reduction over the past month. Shorts have been covering, not piling in. The borrow market is loose — availability runs at over 1,100% of current short interest, meaning shares are plentiful and demand for the borrow is negligible. Cost to borrow is 0.40%, well inside any meaningful squeeze risk territory. The ORTEX short score of 37.5 has trended lower all week from above 40 at the start of May. The options market is similarly composed: the put/call ratio is 0.75, barely above its 20-day average of 0.74, and a z-score just under 0.7 signals no unusual hedging demand. Together, these read as a market that is cautious on Nike but not positioned for catastrophe.
The Street has a more pessimistic tilt than the lending market implies. Downgrades have piled up since early April. Goldman Sachs moved to Neutral from Buy on April 2, cutting its target to $52 from $76. JP Morgan followed on April 1 with a downgrade to Neutral. On May 8 — the most recent major action — Wells Fargo's Ike Boruchow took the stock to Equal-Weight from Overweight with a $45 target, down from $55. That target is barely above the current price, leaving virtually no implied upside from one of the last bulls. The consensus has shifted to 14 buys, 20 holds, and a mean target of $60.77. That target-versus-price gap is substantial, but it partly reflects the pace of downgrades not yet catching up with the stock's fall — some older targets in the $60-$70 range will compress further as analysts update. The bear case centres on tariff headwinds, a slower-than-expected turnaround, and a product mix that still needs work. Bulls point to the World Cup catalyst, China recovery optionality, and an inventory clean-up that should eventually support margins. The PE multiple has already compressed over 30 days to 26.2x, and EV/EBITDA has drifted down to 17.5x — cheaper than a year ago, but not cheap for a business currently in revenue decline.
Institutional flows provide a more constructive counterpoint. Capital Research added 9.6 million shares through April 30, a meaningful commitment. Wellington built a 6.6 million share position in the March quarter. State Street and Geode each added around 2.5 million shares. These are passive-tilted increments in some cases, but Capital Research's move is active and sizeable at a point when most sell-siders were cutting. Founder Philip Knight retains 17.7% of the company and has not changed his position.
The earnings history is sobering. After the March 31 Q4 release, the stock fell 12.9% the following day and 16.7% over the five subsequent sessions — the worst single-earnings reaction in recent memory. The prior print in December produced a more contained 2.1% one-day loss. June 25 is therefore the next hard test, and the setup into it — insiders buying, shorts covering, but the analyst community now broadly cautious and targets clustering $45-$67 — will determine whether the stock needs to reset further or finally finds a base. What to watch is whether the short score and SI hold at current lower levels into the release, or whether renewed covering signals that even the residual bears are stepping aside ahead of the result.
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