Nike
St. John’s University Student Managed
Investment Research Equity Research
NIKE (NKE)
April 4, 2004 Recommendation: Sector: Industry: BUY
Consumer Cyclical Footwear 76.64 78.56 49.60 263.12M .80 20.17B 10,697M 21.66% $94.85
Price: 52 – Week High: 52 – Week Low: Shares Out (mil): Dividend: Market Cap: 2003 Revenue: Project EPS Growth: 2005 Target Price:
Highlights
Rudy Dermesropian rdermes@hotmail.com Jason A. Drago Jdrag636@stjohns.edu Gintare Grigaite Gintare.grigaite01@stjohns.edu Tennille Lopez Tennille.lopez00@stjohns.edu • • The stock is currently undervalued at a price of $76.64. Our 2005 target price is $94.85. In 2003, NIKE reported revenues of $10.7 billion, an 8 percent increase from FY'02. The best year of the company's 31-year history. NIKE is ranked # 1 in the footwear industry NIKE’s Market Capitalization is 20.17B compared to 2.49B of leading competitor Reebok and 334.60M for the entire Industry. Net income had risen 61% as demand for sneakers surged in March of 2004.
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Executive Summary:
We are recommending the purchase of 150 of shares of NIKE on limit order at $70 and 150 shares at market order for the following reasons: • • • • We have set the target price at $94.85, based on our P/E average of 24.70 by our 2005 estimated EPS of $3.84 The stock is currently undervalued at a price of 76.64 (April 4th 2003). Our calculations indicate that Nike’s intrinsic value is $88.10 The continuous increase in dividends throughout the years The 21% increase in third quarter revenues and the expectation of higher figures for the overall year.
Company Description:
NIKE, Inc. is engaged in the design, development and worldwide marketing of footwear, apparel, equipment and accessory products. It sells its products to approximately 18,000 retail accounts in the United States and through a mix of independent distributors, licensees and subsidiaries in nearly 200 countries. NIKE's athletic footwear products are designed for specific
Investment Research Equity Research
NIKE (NKE)
April 4, 2004 Recommendation: Sector: Industry: BUY
Consumer Cyclical Footwear 76.64 78.56 49.60 263.12M .80 20.17B 10,697M 21.66% $94.85
Price: 52 – Week High: 52 – Week Low: Shares Out (mil): Dividend: Market Cap: 2003 Revenue: Project EPS Growth: 2005 Target Price:
Highlights
Rudy Dermesropian rdermes@hotmail.com Jason A. Drago Jdrag636@stjohns.edu Gintare Grigaite Gintare.grigaite01@stjohns.edu Tennille Lopez Tennille.lopez00@stjohns.edu • • The stock is currently undervalued at a price of $76.64. Our 2005 target price is $94.85. In 2003, NIKE reported revenues of $10.7 billion, an 8 percent increase from FY'02. The best year of the company's 31-year history. NIKE is ranked # 1 in the footwear industry NIKE’s Market Capitalization is 20.17B compared to 2.49B of leading competitor Reebok and 334.60M for the entire Industry. Net income had risen 61% as demand for sneakers surged in March of 2004.
• •
•
Executive Summary:
We are recommending the purchase of 150 of shares of NIKE on limit order at $70 and 150 shares at market order for the following reasons: • • • • We have set the target price at $94.85, based on our P/E average of 24.70 by our 2005 estimated EPS of $3.84 The stock is currently undervalued at a price of 76.64 (April 4th 2003). Our calculations indicate that Nike’s intrinsic value is $88.10 The continuous increase in dividends throughout the years The 21% increase in third quarter revenues and the expectation of higher figures for the overall year.
Company Description:
NIKE, Inc. is engaged in the design, development and worldwide marketing of footwear, apparel, equipment and accessory products. It sells its products to approximately 18,000 retail accounts in the United States and through a mix of independent distributors, licensees and subsidiaries in nearly 200 countries. NIKE's athletic footwear products are designed for specific