Nike's stock has plummeted over 50% as CEO Elliott Hill's turnaround strategy has failed to reverse declining sales, particularly in China where revenue dropped 26% year-over-year. With only 26% of analysts rating it a buy and competitors like On Holding and Deckers Outdoor gaining market share with stronger margins, the article suggests waiting for the new Pace cost-cutting plan to show results before investing, rather than buying into the current pessimism.

Six major blue-chip stocks—Nike, Goldman Sachs, Intel, Disney, Pfizer, and Home Depot—are trading at least 20% below their all-time highs despite a strong bull market. The article analyzes each stock to determine whether they represent bargains or value traps, considering factors like valuation metrics, competitive pressures, and market sentiment.

Nike is reassuring investors that it has the right strategy in place as the company continues to recover from a strategic decision that backfired years ago. The stock has declined significantly, down 80% from its all-time high, though it showed a 5.21% gain on October 13, 2026.

Nike stock rose 5.3% as investors rotated from high-priced tech stocks to value plays in consumer discretionary sectors. The gain was part of a broader market shift rather than company-specific news. While Nike offers a 4.6% dividend yield and remains the biggest sports brand, the company continues to struggle with flat or declining revenue growth over the past three years, requiring faith in CEO Elliott Hill's turnaround efforts.

Nike is undergoing a business restructuring as the company faces significant challenges with declining sales and rising costs. The stock has fallen 80% from its all-time high, reflecting management's difficulty in recovering from a major strategic shift that did not yield positive results.

Carter's (CRI) emerges as the superior value stock compared to Nike (NKE) based on valuation metrics and analyst outlook. CRI has a Zacks Rank of #2 (Buy) with a forward P/E of 9.72, while NKE holds a Zacks Rank of #5 (Strong Sell) with a forward P/E of 26.64. CRI's Value grade of A significantly outperforms NKE's Value grade of D across multiple metrics including P/B ratio and PEG ratio.

The article examines three S&P 500 stocks down over 80% from their all-time highs: Nike, PayPal, and PG&E. While deeply discounted valuations might attract contrarian investors, the author recommends caution. Nike faces persistent competitive pressures and declining consumer value perception. PayPal, despite a 82% decline, maintains solid fundamentals with 5% revenue growth and a 45% market share in online payments, making it potentially worth buying. PG&E remains burdened by wildfire liability concerns and uncertain government policy protection, making it a risky bet.

NIKE is investing heavily in digital transformation to strengthen its direct-to-consumer business, but faces significant challenges as online demand weakens. In fiscal Q1 2027, Direct revenues fell 8% and Brand Digital sales declined 13%, raising concerns about the company's ability to convert digital investments into sustained revenue growth. Rising digital costs and weak online demand could further pressure profit margins.

Q3 earnings season kicks off this week with major companies including JPMorgan, Citigroup, and others reporting results. S&P 500 earnings are expected to grow +24.3% year-over-year, marking the 8th consecutive quarter of double-digit growth. However, banks face headwinds from rising Treasury yields impacting net interest margins and deal flow. Of 19 S&P 500 companies that have already reported, 78.9% beat EPS estimates, though results are heavily skewed by Micron's exceptional +1075.7% earnings growth.

Q3 earnings season begins with JPMorgan, Citigroup, and others reporting results. S&P 500 earnings are expected to grow 24.3% YoY with positive revisions across 7 of 16 sectors. However, banks face pressure from rising Treasury yields impacting net interest margins and deal flow. Of 19 companies that have reported, 78.9% beat EPS estimates, though results are heavily skewed by Micron's exceptional performance.

Nike stock has declined 5.1% over the past month, underperforming the S&P 500. The company faces significant headwinds with earnings estimates revised downward by 24.3% for the current quarter and 25.6% for the fiscal year. Nike received a Zacks Rank #5 (Strong Sell) rating due to negative earnings estimate revisions, though the company has historically beaten EPS estimates. Revenue growth is also expected to decline 7.9% for the current fiscal year. The stock is trading at a premium valuation relative to peers.

NIKE shares declined 2.2% after reporting Q1 fiscal 2027 earnings that beat expectations but showed a 4% revenue decline. Greater China sales plunged 22% and weakness in Sportswear and Jordan Brand offset gains in performance categories. The company expects fiscal 2027 revenues to fall at a high-single-digit rate despite $2.5B in planned Pace savings, with analysts downgrading earnings estimates significantly.