According to the Financial Times, the JD Sports Fashion (LSE:JD.) share price is 70% more volatile than the FTSE 100. This doesn’t surprise me. At first glance, the chart below looks a bit like the Himalayas. Since the start of June 2020, the ‘King of Trainers’ has seen its stock price fluctuate between 61p and 233p.
‘Expert’ opinion
For the year ending 3 February 2026 (FY26), the consensus forecast of the 18 analysts covering the stock is for earnings per share (EPS) of 11.81p. The same brokers have a 12-month price target of 95p (range 83p-200p). This suggests they are ‘comfortable’ with a valuation of eight times forward earnings.
Looking further ahead, they’re expecting EPS of 13.21p (FY27) and 15.28p (FY28). Applying a multiple of eight to these numbers implies a share price of 106p and 122p. Today (31 May), the stock changes hands for 83p.
If these forecasts prove correct, a £10,000 investment (12,048 shares) could grow to £14,699 by early 2028.
However, the retailer also pays a dividend, albeit a miserly one — the stock’s current yield is 1.2%. However, let’s not knock the concept of passive income. After all, something’s better than nothing.
Analysts are forecasting dividends over the next three years of 1.01p (FY26), 1.15p (FY27) and 1.25p (FY28). If these predictions are correct, £10,000 could generate income of £410 between now and 2028.
When added to the anticipated share price growth, that’s a 51% return.
Buyer beware
But this analysis comes with a rather obvious note of caution. Namely, the analysts might be wrong. In fact, they probably will be. That’s because predicting share prices and dividends isn’t easy.
In November 2021, when the JD Sports share price was just over 230p, I don’t think many would have expected it would fall more than 50% within a year. And I suspect fewer still would have predicted a price of close to 61p within three and a half years.
But the group’s been caught in the fallout from Trump’s tariffs. Following its acquisition of Hibbett, the US chain with over 1,100 stores, it now has greater exposure to North America.
It’s also suffered as a result of Nike’s woes. The US sportswear giant has seen its stock price tumble more than a third in 12 months as it struggles to reverse falling sales. Although unconfirmed, it’s believed Nike accounts for around half of the British retailer’s sales.
But rapidly changing tastes and trends are to be expected in the fashion industry. And the challenge for the group is to make sure it’s in a position to respond quickly.
My opinion
However, despite these risks, I think the stock’s cheap by historical standards. Also, the retailer steadfastly refuses to engage in extensive discounting. This harms its top line but helps maintain a strong margin.
According to Euromonitor International, the global sportswear market will grow by an average of 6.6% a year through to 2030. This is part of a long-term trend that’s seen consumers moving away from formal clothing to lifestyle apparel and footwear. To capitalise, the group intends to open 200-250 new stores each year.
For these reasons, I think long-term investors could consider taking a position. However, I suspect the share price will continue to be volatile.
