A fallen share price tends to get my value-receptors twitching and right now I like the look of JD Sports Fashion (LSE: JD) in the FTSE 100.

The global omnichannel retailer of sports fashion and outdoor brands has seen its share price drop by around 35% since September. Now the stock’s in the ballpark of 102p, as I write, on 11 December.

Recent volatile trading

The company issued a profit warning in its trading update of 21 November. But as often happens, the market saw it coming and the share price had already fallen a fair bit by then.

Despite the lower guidance, City analysts predict a double-digit percentage uplift in normalised earnings next year. So there’s a possibility of better value here now for investors.

In November’s trading update, chief executive Régis Schultz said there had been a volatile trading environment in the firm’s markets at home and abroad. Weaker business during October led to the directors downgrading pre-tax profit expectations for the year to the “lower end” of earlier guidance.

However, the damage may not be as bad as it sounds. Analysts have pencilled in a little dip for normalised earnings this year worth just over 4%. But as mentioned, they expect earnings to come roaring back the year after with an increase of about 14%.

It’s no secret the retail environment has been challenging over the past few years. I think that reality shows in JD Sports Fashion’s share price chart. The current level of the stock was first reached around five years ago. It’s been swinging up and down ever since.

However, this is still a growth proposition. On top of its large UK market, the business has been making strides expanding in the US and internationally. Progress has been both organic and by acquisition. Meanwhile, annual revenue has grown from around £6bn in 2019 to about £10bn in 2023.

A keener valuation

That performance led to a doubling of normalised earnings per share over the same period. So it looks like the main casualty of all the general economic challenges experienced by the company has been the valuation.  

Based on those earnings estimates for the trading year to January 2026, the forward-looking price-to-earnings (P/E) multiple is around seven. I reckon that looks undemanding and makes the company worthy of investors further research and consideration now.

However, it’s worth bearing in mind that this isn’t the only retailer with a recently fallen share price. We’ve seen similar plunges from the likes of Frasers, Card Factory, WH Smith, Wickes and others.

Such stock weakness underlines one of the main risks for shareholders in the sector — it’s highly cyclical. So that means shareholders in JD Sports Fashion may endure a volatile ride ahead as the business is buffeted by future general economic and geo-political events and shocks.

Even at this lower valuation, it would be easy to mistime an investment and lose money on the shares. Nevertheless, there’s an underlying growth story going on here. So it looks like a good time to become interested and research the opportunity while the valuation appears keen.