Nike Stock Crash Pushes Dividend Yield Near Treasury Note Levels
Nike's (NKE) recent stock crash has pushed its dividend yield to a level comparable with the 2-year Treasury note (ZT=F). As of Monday, Nike's dividend yield stood at 4.87%, just slightly above the 4.85% yield on the 2-year Treasury.
Analysts see potential in Nike despite its current struggles. Jefferies analyst Randy Konik noted that for investors willing to overlook short-term volatility, Nike offers both income and recovery potential. However, the company's recent earnings report painted a grim picture.
Nike's CEO Elliott Hill warned that the weak sportswear market will likely persist, leading the company to discount slow-moving products. This could pressure other firms in the sector to follow suit. Additionally, Nike's earnings guidance for the full fiscal year fell short of analyst expectations.
The quarterly results were particularly concerning, with Nike Brand sales dropping 4%, online sales plummeting 13%, Converse sales tanking 28%, and China sales crashing 26%. The company also announced plans for significant layoffs. Nike's stock has fallen 47% year to date and 77% over the past five years.
Stifel analyst Peter McGoldrick cautioned that he is not ready to call a bottom for the stock, which is currently trading at 28x P/E at the midpoint of FY27E guidance.