Nike Insiders Are Buying-But the Downside Risk Isn't Gone

Nike (NYSE: NKE) insiders bought shares at the end of 2025, highlighting the deep value and signaling confidence in the turnaround. Insiders included CEO Elliott Hill and two directors, but investors should think twice before following them into the trade.

While they and other indicators suggest a robust rebound is likely, factors such as analysts' sentiment trends and institutional selling suggest the bottom may not be as firm as it appears. Meanwhile, other insiders, including the Chairman of the Board, sold shares earlier in Q4 2025, helping to keep shares trending near long-term lows. 

Analyst Downgrades and Institutional Selling Pressure Nike

Analysts merely present a downdraft in sentiment, lowering price targets and sentiment ratings in 2025 and early 2026. The primary factor is the price target revision trend, which shaved more than 15% off the consensus price target and now points to $35. A move to $35 is worth a 45% decline in share price as of early January 2026, and institutions may push it there. Institutional trends are more significant, as they own 65% of the stock, reverted to selling on balance over buying on balance in Q4 2025, and sustained bearish activity in the first week of 2026. Selling ramped higher the first week of 2026, running a balance of more than $8 sold for each $1 bought, presenting a significant headwind for the market. 

The chart is iffy. The 2025 price action can be read two ways: the first suggests a bottom is in play, and the second a downtrend gearing up for a sell-off. Given the institutional selling and analysts' downdraft, the second appears the more likely; however, analysts remain optimistic. They continue to rate the stock as a consensus Moderate Buy, with a 15% upside to the $75 consensus price. The low-end is $35, but most recent revisions suggest fair value in the mid-$60 range, where Nike stock trades. The question now becomes: what could be the catalyst to move this market? The answer is the FQ3 earnings report scheduled for mid-March. 

Nike’s Q3 FY2026 Earnings Could Decide the Stock’s Next Move

Nike’s Q3 fiscal year 2026 (FY2026) results will be a catalyst for price action, as they will affirm or refute the market's low expectations. As it stands, 100% of analysts reduced their revenue and earnings forecasts for the quarter. The forecasted sequential and year-over-year decline in revenue, margin, and earnings, with trends indicating below-consensus results. The risk is that results will align with this outlook, suggesting the business will continue to underperform in the year ahead, while the opportunity is outperformance. Outperformance signals core strength, if not a turnaround gaining traction, and may lead analysts into a more bullish revision trend.

Risks for Nike include intense competition, margin pressure, and its direct-to-consumer (DTC) retail business. Competition is primarily from brands such as On Holding AG (NYSE: ONON), whose Cloud technology is featured across a range of shoes and is gaining traction in critical markets. Tariffs, challenges in the DTC business, and pressure on margins due to inventory reduction continue to affect operations, along with fallout and lost market share from the DTC business. 

A risk for investors is the capital return. The capital return appears reliable for 2026, but contracting business and deteriorating earnings quality will pressure its ability to distribute capital in future periods. The forecasted payout ratio for 2026 is just over 100%, suggesting the pace of increases and share buybacks will be affected, if not the payment itself, as calendar 2026 progresses. Assuming the Q3 FY2026 results are less than satisfactory, forecasts for subsequent fiscal periods will tumble, increasing the risk that the pace of capital return will slow or decline. 

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The article "Nike Insiders Are Buying—But the Downside Risk Isn’t Gone" first appeared on MarketBeat.