Nike Share Price May Be Undervalued by Up to 12%, Analysts Say

Nike's share price has fallen sharply over the past few years, and recent analyst downgrades have pushed the story forward. The key issue now is whether the current market value of Nike (NKE) can be supported by the cash flows the business is expected to produce.

Over the past five years, the stock has declined by 73.3%, which puts a spotlight on whether the cash generation profile now supports the lower share price. Analysts have cut earnings expectations and pointed to softer global sales trends, suggesting that assumptions about Nike's future revenue trajectory and profitability may be under pressure.

The issue is whether Nike's current share price of $36.10 is adequately supported by the cash flows implied in its Discounted Cash Flow (DCF) based intrinsic value estimate. The DCF model assumes that Nike's cash generation grows from a base of about $2.25 billion over the coming decade rather than shrinking.

Recent analyst cuts to earnings forecasts ahead of fiscal 2027 and concerns around execution and sales trends help explain why the market price still sits below what the cash flow model implies. The DCF estimate comes out modestly above the current share price, suggesting that Nike may be undervalued by as much as 12%.