Equity valuation of Nike, Inc.

Abstract

Nike, Inc., a prominent player in the sportswear industry, has consistently maintained its position as a market leader. As such, the primary objective of this master’s thesis is to establish a target price for Nike, Inc. by the end of the fiscal year 2024 (31/05/2024) and subsequently offer an investment recommendation based on selected valuation methodologies. This thesis employs a comprehensive analysis of Nike’s competitive positioning within the industry, historical performance, and the prevailing global macroeconomic landscape. Through a meticulous application of valuation techniques and assumptions, our analysis culminated in the determination of a target price of $104,45 per share for Nike, Inc. as of 31/05/2024, utilizing the Weighted Average Cost of Capital (WACC)-based Discounted Cash Flow (DCF) approach. This represents a 5,3% upside potential from the current price of $99,16 per share. In light of these findings, we advocate a prudent stance of HOLD for Nike, Inc. Given its robust track record, coupled with the macroeconomic outlook and the calculated target price, we propose monitoring the company's performance closely in the immediate future. This recommendation provides investors with a cautious yet optimistic approach, allowing for continued assessment of Nike's trajectory amidst dynamic market conditions.

Date of Award	8 May 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)