Nike designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories for men, women, and kids worldwide. The company offers products in eight categories, including running, basketball, football, mens training, womens training, sportswear, action sports, and golf under the NIKE and Jordan brand names. The company was founded in 1964 and is based in Beaverton, Oregon.
NKE Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for NIKE Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that NIKE Inc ranked in the 21th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for NIKE Inc ended up being:
The company has produced more trailing twelve month cash flow than 96.81% of its sector Consumer Cyclical.
The business' balance sheet reveals debt to be 4% of the company's capital (with equity being the remaining amount). Approximately only 12.53% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
NKE's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 49.18% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
JAX, M, MOV, UFI, and BURL can be thought of as valuation peers to NKE, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.