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:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for NIKE Inc. To summarize, we found that NIKE Inc ranked in the 8th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. As for the metrics that stood out in our discounted cash flow analysis of NIKE Inc, consider:
The company's compound free cash flow growth rate over the past 5.76 years comes in at -0.03%; that's greater than merely 21.28% of US stocks we're applying DCF forecasting to.
The business' balance sheet reveals debt to be 6% of the company's capital (with equity being the remaining amount). Approximately merely 16.34% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than only 0% of stocks in its sector (Consumer Cyclical).
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 APEX, CRMT, BLMN, CBRL, and DIS.
As I've mentioned in previous articles, the "athleisure" / athletic apparel market is poised for growth due to certain circumstances brought upon by the pandemic. I wanted to look for additional names that could capitalize on this trend. Foot Locker (FL) seemed initially interesting to me. However, after doing some...
We rarely publish bearish or "stocks-to-avoid" types of articles, as we are usually focused on identifying and analyzing securities with the highest expected returns. However, sometimes, we can't hold back but express a less bullish opinion. This is exactly the current case with Nike's (NKE) shares. On a performance basis...
Nikolaos Sismanis on Seeking Alpha | October 2, 2020
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