Valuation of Nike Inc.

• Autor(a) principal: Freixo, Miguel Carlos
• Data de Publicação: 2022
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/28294
• topic: Nike; DCF Discounted Cash Flow --; EVA; Multiples; Sportswear and athletic footwear; Avaliação de empresas -- Business valuation; Múltiplos; Roupa e calçado desportivo

Nike is one of the most well- known companies in the world and the leader in the sportswear and athletic footwear industry. Since it is such an important company in the industry, it is important to understand its value and whether it represents a good investment The valuation models used in this project are divided into two different approaches: absolute valuation using DCF model and EVA model, and relative valuation using multiples model. Analysing the financial ratios, we found that Nike has increased its debt and that the company's ROE has increased due to leverage. The company had a return on invested capital (ROIC) that exceeded WACC in all years analysed, creating value consistently. Nike also exhibits good liquidity as it is able to continuously pay its current liabilities. Through this analysis, it is clear that although the pandemic crisis had a strong negative impact on the industry and the company itself, Nike was able to respond excellently in the following year, unlike some of its competitors. The objective of this study was to estimate the value of Nike stock on May 31, 2021, with the market price at that time being $136. Using the DCF and EVA models, the same stock price of $136,41 was determined, which is quite close to the market price and indicates that the company is valued correctly. Based on the results obtained by the different models and the financial analysis performed, investors are recommended to hold the stock.