Nike's Stock Slides to 201st in Volume Amid Tariff Jitters Despite Strong Q3 Earnings

Market Snapshot

Nike Inc. (NKE) closed 1.08% lower on February 25, 2026, with a trading volume of $0.60 billion, reflecting a 34.06% decline compared to the previous day. This placed the stock at 201st in market volume rankings. Despite beating third-quarter (Q3) earnings estimates with $0.53 per share (versus $0.37 expected) and $12.43 billion in revenue, the stock’s decline was attributed to renewed tariff-related margin risks and a "Moderate Buy" analyst consensus price target of $74.61.

Key Drivers

Nike’s Q3 performance was marked by strong earnings and revenue, yet the stock faced downward pressure from macroeconomic concerns. The company reported a 43.24% earnings surprise and 1.64% revenue outperformance, driven by an 8% wholesale expansion and a 20% growth in its running segment. However, gross margins contracted by 300 basis points to 40.6%, signaling ongoing cost pressures. The 2.6% dividend yield (annualized $1.64) added defensive appeal but could not offset broader market anxieties.

Institutional and Insider Buying Signal Confidence

Despite the price decline, institutional and insider buying underscored confidence in Nike’s long-term prospects. Palumbo Wealth Management LLC significantly increased its stake by 389.8% in Q3, holding 72,371 shares valued at $5.04 million, now 1.3% of its portfolio. Two board members, Robert Holmes Swan and Timothy D. Cook, acquired 8,691 and 50,000 shares, respectively, boosting insider ownership to 0.8%. Other institutional investors, including Twin Peaks Wealth Advisors and NewSquare Capital LLC, also adjusted their holdings, reflecting a mix of new investments and incremental purchases.

Tariff Uncertainty and Analyst Caution Weigh on Momentum

The stock’s decline was exacerbated by renewed trade-policy risks. The Trump administration’s announcement of new global tariffs reignited concerns about margin compression for global apparel manufacturers like Nike. Analysts highlighted a 15% duty increase following a Supreme Court decision, which could pressure gross margins and offset Nike’s recent cost-cutting efforts. While the company aims to return to double-digit EBIT margins, analysts’ mixed outlook—ranging from "Overweight" at Wells Fargo to "Underperform" at BNP Paribas—reflected lingering uncertainty.

Earnings Optimism vs. Structural Challenges

Nike’s Q3 results demonstrated resilience, with inventory levels down 3% year-over-year and a focus on resetting its marketplace. CEO Elliott Hill emphasized the company’s "middle innings of our comeback," citing growth in China and margin expansion targets. However, Q3 guidance projected revenue declines in low single digits and further margin compression, complicating near-term optimism. The stock’s 50-day moving average at $63.37 and 200-day average at $67.29 suggested a technical bearish trend, aligning with the 1.08% drop.

Analyst Price Targets and Valuation Metrics

While 23 analysts maintained "Buy" or "Strong Buy" ratings, the average price target of $74.61 implied a 17.3% upside from the February 25 closing price. Nike’s price-to-earnings ratio of 37.04 and PEG ratio of 3.35 highlighted valuation concerns, particularly given its beta of 1.27, indicating higher volatility than the market. The stock’s recent performance contrasted with long-term bullish narratives, such as Seeking Alpha’s "Buy" initiation citing inventory improvements and margin recovery, but near-term headwinds from tariffs and inventory adjustments limited investor enthusiasm.

The interplay of earnings strength, strategic investments, and macroeconomic headwinds paints a nuanced picture for Nike. While institutional and insider confidence suggests a favorable long-term outlook, immediate challenges from trade policies and margin pressures will likely keep the stock under pressure until these factors stabilize.