After falling 16%, FTSE 100 stock JD Sports Fashion looks like a steal to me

You share JD Sports Fashion (LSE: JD.) recently dropped. Yesterday (21 November), the FTSE 100 the stock is down 16%. Since mid-September, it’s down nearly 40%.

Is there a price offer after the latest release? I think so. In my opinion, this stock is a steal at current levels.

I am the financier here

I have a small position in JD Sports Fashion. I bought some stocks a few months ago as I was looking for exposure to the athletic footwear market.

It is fair to say that the trade did not go as planned. Since I bought, the share price has gone down.

That’s why I keep building positions in companies little by little over time. If I had gone ‘all in’ on JD a few months ago, I would now be facing a huge loss instead of a tangible one.

Why did I invest?

I’ll look at why the stock dropped 16% yesterday in a minute. First though, I want to explain why I invested here (it’s always a good idea to go back to one’s notes and look at why we invested in a stock in the first place).

For me, the key factors were:

• JD provides exposure to the fast-growing athletic footwear market.
• The group sells many brands including Nike, AdidasHook up, once Opened.
• The company distributes stores all over the world.
• It has a large presence in the US, which has a strong economy.
• The fit was attractive.

When I bought, I noticed that the stocks were volatile. I did not expect this kind of decline.

What has changed?

If you look at those bullet points, nothing has changed. Apart from the fact that the measurement is now even more attractive.

Yesterday, the group posted its Q3 trading update and the market didn’t like it. But the report was not bad. For the quarter, group sales growth was 5.4% with 10.4% growth in Europe and 5.9% growth in the US. During that time, the company opened 79 more stores.

The problem was that trading was volatile due to bad weather (we’ve been warming up in the US lately) and cautious consumer behavior (the US election may have been a factor here). As a result of the change, the company said it now expects full-year profit to be at the lower end of its guidance range (£955m to £1,035m). That is wrong. For me though, the end of the direction is not a disaster.

I see the value here

After the recent price, the stock looks really cheap to me.

For the year ending 31 January 2026 (the next financial year), analysts expect JD to make earnings per share of 15p. Let’s be careful and say it makes 75% of what would be 11.3p.

At today’s share price of 95p we have a forward price-to-earnings (P/E) ratio of just 8.4. That’s a low estimate.

Will I buy more shares myself? It is possible. I haven’t decided yet.

I think the stock is a steal at current prices. However, I am happy with my position size given the uncertainty in consumer spending in the near term.

Meanwhile, there are many other market opportunities that I am looking at. I have more confidence in some of these other ideas.