Nike stock Valuation
SCHOOL OF FINANCE
SOUTHWESTERN UNIVERSITY OF FINANCE AND ECONOMICS
CHENGDU, SICHUAN, CHINA PR
NIKE,INC. ANALYSIS REPORT
An academic written sample from Liu Yijun
In support of applying MSc Finance at Manchester University
Note: This is a short version only covered what was performed by Liu Yijun, including brief introduction, the calculation of FCF, WACC, sensitivity analysis and word typesetting
In partial fulfillment of the requirements for the course
Equity Investment
January, 2013
1 January 2013|Equity Investment|NIKE Inc Financial Report
Recommendation
BUY
Price at 9 Jan 2013 (USD):
$52.45
Price Target: $63.17
52 Week Range: $50.99–
$111.81
Summary
Section4 –
Valuation
Reasons about using
FCF analysis
Computing FCFF from
Net Income and CFO &
Computing FCFE from
FCFF
Report Introduction
Nike is the largest footwear company in the world selling footwear, apparel, equipment through 25,000 retailers. As a stable, yet fast growing company, Nike is facing several obstacles in its core section. In this report, we have done thorough business analyses using Porter’s Five Force and
SWOT approach to get the fundamentals of market condition where Nike stands. In the second step, we finished the estimation of the investment value and risk of Nike by FCF, PE
Ratio and RIM. Finally, we give the recommendation of buy on
Nike’s share and the target price is $63.17.
Note: All the calculation formula and processes are listed in the
Appendix.
The company’s dividends policies are not stable every year, sometimes Nike does not pay any dividends. In some years the company pays dividends but the dividends paid differ significantly from the company’s capacity to pay dividends.
Moreover, FCF align with profitability within a reasonable forecast period with which the analyst is comfortable. Last, the investor takes a control perspective in Nike company as well as there was an M&A in year 20008.
Under the
SOUTHWESTERN UNIVERSITY OF FINANCE AND ECONOMICS
CHENGDU, SICHUAN, CHINA PR
NIKE,INC. ANALYSIS REPORT
An academic written sample from Liu Yijun
In support of applying MSc Finance at Manchester University
Note: This is a short version only covered what was performed by Liu Yijun, including brief introduction, the calculation of FCF, WACC, sensitivity analysis and word typesetting
In partial fulfillment of the requirements for the course
Equity Investment
January, 2013
1 January 2013|Equity Investment|NIKE Inc Financial Report
Recommendation
BUY
Price at 9 Jan 2013 (USD):
$52.45
Price Target: $63.17
52 Week Range: $50.99–
$111.81
Summary
Section4 –
Valuation
Reasons about using
FCF analysis
Computing FCFF from
Net Income and CFO &
Computing FCFE from
FCFF
Report Introduction
Nike is the largest footwear company in the world selling footwear, apparel, equipment through 25,000 retailers. As a stable, yet fast growing company, Nike is facing several obstacles in its core section. In this report, we have done thorough business analyses using Porter’s Five Force and
SWOT approach to get the fundamentals of market condition where Nike stands. In the second step, we finished the estimation of the investment value and risk of Nike by FCF, PE
Ratio and RIM. Finally, we give the recommendation of buy on
Nike’s share and the target price is $63.17.
Note: All the calculation formula and processes are listed in the
Appendix.
The company’s dividends policies are not stable every year, sometimes Nike does not pay any dividends. In some years the company pays dividends but the dividends paid differ significantly from the company’s capacity to pay dividends.
Moreover, FCF align with profitability within a reasonable forecast period with which the analyst is comfortable. Last, the investor takes a control perspective in Nike company as well as there was an M&A in year 20008.
Under the