Nike looks overvalued at about 25.6x forward earnings for a business guiding to high-single-digit revenue declines. At $32 on $1.25 of EPS, per the lowered guidance @TrendSpider reports, plus a 5% dividend, tobacco stocks like Altria should triple if that is the going rate for shrinking sales. Nike does not merit a tobacco multiple: it angered its distributors, faces more premium rivals and new entrants, has less loyal customers, is no government-mandated duopoly and pays for costly marketing. … Show more

Lululemon is probably going lower because sales and margins are imploding while inventory grows, and a new unproven CEO is coming in. Q3 guidance calls for revenue down 10-11%, North America down mid-teens and inventory up low single digits; full-year revenue should fall 5-7% with inventory up mid single digits. Even granting $6 of annualized EPS versus a ~$4 run rate, 12x for an off-trend retailer implies about $70, versus $100 after an 18% drop. x.com  x.com 

Gap looks cheap against its cash earnings, trading at 7x when retailers usually get 12x. Fair value is $46.44 to $59.11, or 12x next year's cash earnings give or take 12%, leaving the $23.48 price 49% below the low end of that range. This is a levels-only read from reported earnings and revenue estimates, with no fundamental work. x.com 

GameStop looks cheap against its earnings. It trades at about 14 times earnings versus the roughly 18 times retailers usually get. Applying 18 times to next year's estimated $1.37 a share, give or take 12%, gives a fair value of $21.70-27.62, leaving the stock 13% below the bottom of that range. This is a valuation read only, with no fundamental work behind it. x.com 

Costco is hard to justify at more than 40 times forward earnings while earnings grow only in the low teens. It behaves more like a sticky, mature subscription business than a traditional retailer, but that does not support the multiple. x.com