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 18th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. As for the metrics that stood out in our discounted cash flow analysis of NIKE Inc, consider:
As a business, NKE is generating more cash flow than 96.61% of positive cash flow stocks in the Consumer Cyclical.
The business' balance sheet suggests that 5% of the company's capital is sourced from debt; this is greater than only 12.68% of the free cash flow producing stocks we're observing.
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 56.34% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as NKE, try BBBY, ROL, TPCO, ARD, and GTX.