With a P/E of 6.6, does this FTSE 100 stock offer amazing value?
With recent events in the Middle East causing global stock markets to plunge in value, there are more shares than usual currently (4 March) trading close to recent lows.
Indeed, shares in JD Sports Fashion (LSE:JD.) are now changing hands for around half what they were in March 2021. Is this an incredible buying opportunity, or a warning sign of worse to come? Letâs see.
Falling out of fashion
In February, Deutsche Bank cut its price target on the stock. Its analyst expressed concern that âfemale fashion demand is rotating out of the categoryâ and warned that the âcore male consumerâ might do something similar.
Nikeâs recent problems, most notably a lack of innovation, have also weighed on the group. Itâs believed that the American sportswear giant accounts for around half of the British retailerâs sales.
A look at JD Sportsâ website shows that Nikeâs listed at the top of each product category with other brands following in alphabetical order. The five-year share price chart of the two shows how important the relationship is, certainly in the minds of investors.
Not a one-trick pony
However, JD Sportsâ buyers know they must follow the latest trends.
That’s why the landing page of its website has a heavy emphasis on Adidas at the moment. Today, the German sports brand reported record annual revenue in 2025 and a 54% year-on-year increase in its operating profit to â¬2.056bn. For 2026, itâs expecting this to improve to â¬2.3bn, despite a â¬400m hit from US tariffs and unfavourable currency movements.
Encouragingly, Nike claims to be in the âmiddle inningsâ of its turnaround. Itâs stopped its revenue from falling and is recovering strongly in North America. It should also benefit from this summerâs World Cup being held in its back yard.
Fears that the athleisure market may be in decline appear greatly exaggerated.
My view
To reverse the decline in its share price â itâs fallen 21% since September 2025 â I think JD Sports is going to have to convince investors that it can grow its like-for-like sales. In recent years, itâs expanded by buying more stores. However, this has masked a disappointing performance from its existing footprint.
But it can only do this if the groupâs core demographic of 18-to-24-year-olds spends more via its website or in its stores. And this might not happen if artificial intelligence (AI) wipes out loads of entry-level jobs.
However, at the moment, the groupâs looking to harness AI to its advantage. To reflect changing shopping habits of this tech savvy generation, the groupâs launched a âone-click purchaseâ offering using ChatGPT and Microsoft Copilot. Initially, this will be available only in the US but it will be rolled out elsewhere if it proves to be successful.
Personally, I believe JD Sportsâ shares offer tremendous value. The stockâs trading at just 6.6 times its current year forecast earnings. But I understand the apparent investor nervousness. Despite this, I remain optimistic that the group will start to grow organically soon. It continues to be strongly cash generative and, if leases are excluded, it has no debt on its balance sheet. Its recent expansion in the US looks like a smart move.
On balance, I think the stock could be considered by patient long-term investors looking to take a position in an undervalued business.
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James Beard has positions in JD Sports Fashion. The Motley Fool UK has recommended Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
