June 11, 2017
NYSE: NKE
NIKE INC
BUY
A+
A
A-
HOLD
B+
B
Annual Dividend Rate
$0.72
B-
C+
C
Annual Dividend Yield
1.35%
SELL
C-
D+
D
Beta
0.46
Sector: Consumer Goods & Svcs
NKE BUSINESS DESCRIPTION
NIKE, Inc., together with its subsidiaries, designs,
develops, markets, and sells athletic footwear,
apparel, equipment, and accessories worldwide.
STOCK PERFORMANCE (%)
3 Mo.
Price Change
-5.86
1 Yr.
-1.70
Weekly Price: (US$)
D-
E+
E
E-
Market Capitalization
$70.3 Billion
Sub-Industry: Footwear
SMA (50)
F
BUY
52-Week Range
$49.01-$60.33
RATING SINCE
TARGET PRICE
06/08/2010
$61.45
Price as of 6/8/2017
$53.20
Source: S&P
SMA (100)
1 Year
2 Years
68
66
64
62
TARGET
TARGET
TARGETPRICE
PRICE
PRICE$61.45
$61.45
$61.45
TARGET
3 Yr (Ann)
11.75
60
58
56
GROWTH (%)
Last Qtr
4.98
20.10
23.63
Revenues
Net Income
EPS
12 Mo.
6.28
7.91
11.11
54
3 Yr CAGR
7.80
15.26
17.48
52
50
48
Rating History
RETURN ON EQUITY (%)
NKE
Q3 2016
32.05
Q3 2015
30.72
Q3 2014
25.11
BUY
Ind Avg
20.88
23.35
20.62
S&P 500
12.81
11.95
14.20
Volume in Millions
200
100
2016
P/E COMPARISON
0
2017
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
22.17
29.58
25.74
NKE
Ind Avg
S&P 500
EPS ANALYSIS¹ ($)
RECOMMENDATION
We rate NIKE INC (NKE) a BUY. This is driven by a number of strengths, which we believe should have a
greater impact than any weaknesses, and should give investors a better performance opportunity than most
stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely
solid financial position with reasonable debt levels by most measures, notable return on equity, growth in
earnings per share and good cash flow from operations. We feel its strengths outweigh the fact that the
company has had lackluster performance in the stock itself.
HIGHLIGHTS
Despite its growing revenue, the company underperformed as compared with the industry average of 7.6%.
Since the same quarter one year prior, revenues slightly increased by 5.0%. Growth in the company's revenue
appears to have helped boost the earnings per share.
2014
2015
Q3 0.68
Q2 0.50
Q1 0.73
Q4 0.49
Q3 0.55
Q2 0.45
Q1 0.67
Q4 0.49
Q3 0.45
Q2 0.37
Q1 0.55
NKE's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that
there has been very successful management of debt levels. To add to this, NKE has a quick ratio of 1.88,
which demonstrates the ability of the company to cover short-term liquidity needs.
2016
NA = not available NM = not meaningful
1 Compustat fiscal year convention is used for all fundamental
data items.
The return on equity has improved slightly when compared to the same quarter one year prior. This can be
construed as a modest strength in the organization. Compared to other companies in the Textiles, Apparel &
Luxury Goods industry and the overall market, NIKE INC's return on equity significantly exceeds that of both
the industry average and the S&P 500.
NIKE INC has improved earnings per share by 23.6% in the most recent quarter compared to the same quarter
a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two
years. We feel that this trend should continue. During the past fiscal year, NIKE INC increased its bottom line
by earning $2.16 versus $1.85 in the prior year. This year, the market expects an improvement in earnings
($2.40 versus $2.16).
Net operating cash flow has increased to $1,067.00 million or 21.80% when compared to the same quarter last
year. In addition, NIKE INC has also modestly surpassed the industry average cash flow growth rate of
17.66%.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: June 11, 2017
PAGE 1
June 11, 2017
NYSE: NKE
NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate
$0.72
Annual Dividend Yield
1.35%
PEER GROUP ANALYSIS
Market Capitalization
$70.3 Billion
52-Week Range
$49.01-$60.33
Price as of 6/8/2017
$53.20
INDUSTRY ANALYSIS
REVENUE GROWTH AND EBITDA MARGIN*
20%
Beta
0.46
The textiles, apparel, and luxury goods industry includes very well-known brands such as Nike (NKE), Coach
(COH), Luxottica Group (LUX), Ralph Lauren (RL), Fossil (FOSL), Under Armour (UA), HanesBrands (HBI),
Columbia Sportswear (COLM), Crocs (CROX), and Movado Group (MOV).
CHKE
FA
While textiles may have once been a large portion of this industry group, that segment is down to a few
players such as Unifi (UFI), Culp (CFI), and Crown Crafts (CRWS). Most of the industry is focused on brands for
shoes, clothing, eyewear, and wrist watches. Companies in the group tend to own a variety of proprietary
brands in order to design, develop, market, and distribute products targeted to specific consumer segments.
ICON
UN
FA
CTHR
-10%
LE
-25%
B
RA
VO
Revenue Growth (TTM)
CROX
E
DECK
WWW
The companies in the textiles, apparel, and luxury goods industry sell their products through multiline
retailers and over the internet. Some of the larger players in this industry group cross over into the specialty
retailer category with exclusively branded stores of their own such as Nike, Coach, Fossil, and Ralph Lauren.
BL
RCKY
RA
VO
SKX
NKE
COH
SHOO
70%
EBITDA Margin (TTM)
Companies with higher EBITDA margins and
revenue growth rates are outperforming companies
with lower EBITDA margins and revenue growth
rates. Companies for this scatter plot have a market
capitalization between $19.9 Million and $70.3
Billion. Companies with NA or NM values do not
appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization.
20%
REVENUE GROWTH AND EARNINGS YIELD
CHKE
PEER GROUP: Textiles, Apparel & Luxury Goods
Recent
Ticker
Company Name
Price ($)
NKE
NIKE INC
53.20
CHKE
CHEROKEE INC/DE
7.00
CROX
CROCS INC
6.82
ICON
ICONIX BRAND GROUP INC
6.31
SKX
SKECHERS U S A INC
26.70
WWW
WOLVERINE WORLD WIDE
26.52
SHOO
MADDEN STEVEN LTD
39.25
DECK
DECKERS OUTDOOR CORP
69.26
CTHR
CHARLES & COLVARD LTD
0.92
COH
COACH INC
46.49
RCKY
ROCKY BRANDS INC
14.40
Market
Cap ($M)
70,305
91
505
360
3,572
2,570
2,333
2,216
20
13,070
107
Price/
Earnings
22.17
NM
NM
NM
17.34
30.14
19.63
461.73
NM
25.13
NM
Net Sales
TTM ($M)
33,917.00
40.62
1,025.04
332.55
3,657.33
2,508.30
1,450.22
1,790.15
23.42
4,509.10
265.80
Net Income
TTM ($M)
4,078.00
-7.93
-15.63
-275.03
239.88
87.00
117.41
5.71
-3.78
520.80
-0.45
The peer group comparison is based on Major Footwear companies of comparable size.
FA
RA
VO
BL
SKX
NKE
COH
RCKY
SHOO
UN
B
RA
VO
LE
-25%
FA
Revenue Growth (TTM)
E
DECK
WWW
CROX
ICON
-80%
CTHR
10%
Earnings Yield (TTM)
Companies that exhibit both a high earnings yield
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between -22.1% and
17.2%. Companies with NA or NM values do not
appear.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: June 11, 2017
PAGE 2
June 11, 2017
NYSE: NKE
NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate
$0.72
Annual Dividend Yield
1.35%
COMPANY DESCRIPTION
NIKE, Inc., together with its subsidiaries, designs,
develops, markets, and sells athletic footwear, apparel,
equipment, and accessories worldwide. It offers products
in nine categories, including running, NIKE basketball,
the Jordan brand, football, men's training, women's
training, action sports, sportswear, and golf. The
company also markets products designed for kids, as
well as for other athletic and recreational uses, such as
cricket, lacrosse, tennis, volleyball, wrestling, walking,
and outdoor activities. In addition, it sells sports apparel;
and markets apparel with licensed college and
professional team and league logos. Further, the
company sells a line of performance equipment,
including bags, socks, sport balls, eyewear, timepieces,
digital devices, bats, gloves, protective equipment, golf
clubs, and other equipment under the NIKE brand name
for sports activities; various plastic products to other
manufacturers; athletic and casual footwear, apparel,
and accessories under the Jumpman trademark; action
sports and youth lifestyle apparel and accessories under
the Hurley trademark; and casual sneakers, apparel, and
accessories under the Converse, Chuck Taylor, All Star,
One Star, Star Chevron, and Jack Purcell trademarks.
Additionally, it licenses agreements that permit
unaffiliated parties to manufacture and sell apparel,
digital devices, and applications and other equipment for
sports activities under NIKE-owned trademarks. The
company sells its products to footwear stores, sporting
goods stores, athletic specialty stores, department
stores, skate, tennis and golf shops, and other retail
accounts through NIKE-owned retail stores and Internet
Websites (direct to consumer operations), as well as
independent distributors and licensees. The company
was formerly known as Blue Ribbon Sports, Inc. and
changed its name to NIKE, Inc. in 1971. NIKE, Inc. was
founded in 1964 and is headquartered in Beaverton,
Oregon.
NIKE INC
One Bowerman Drive
Beaverton, OR 97005
USA
Phone: 503-671-6453
http://www.nike.com
Beta
0.46
Market Capitalization
$70.3 Billion
52-Week Range
$49.01-$60.33
Price as of 6/8/2017
$53.20
STOCK-AT-A-GLANCE
Below is a summary of the major fundamental and technical factors we consider when determining our
overall recommendation of NKE shares. It is provided in order to give you a deeper understanding of our
rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
valuation. Please refer to our Valuation section on page 5 for further information.
FACTOR
SCORE
5.0
Growth
out of 5 stars
weak
Measures the growth of both the company's income statement and
cash flow. On this factor, NKE has a growth score better than 90% of
the stocks we rate.
strong
2.5
Total Return
out of 5 stars
weak
Measures the historical price movement of the stock. The stock
performance of this company has beaten 40% of the companies we
cover.
strong
5.0
Efficiency
out of 5 stars
weak
Measures the strength and historic growth of a company's return on
invested capital. The company has generated more income per dollar of
capital than 90% of the companies we review.
strong
2.5
Price volatility
out of 5 stars
weak
Measures the volatility of the company's stock price historically. The
stock is less volatile than 40% of the stocks we monitor.
strong
5.0
Solvency
out of 5 stars
weak
Measures the solvency of the company based on several ratios. The
company is more solvent than 90% of the companies we analyze.
strong
3.5
Income
out of 5 stars
weak
Measures dividend yield and payouts to shareholders. The company's
dividend is higher than 60% of the companies we track.
strong
THESTREET RATINGS RESEARCH METHODOLOGY
TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.
Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: June 11, 2017
PAGE 3
June 11, 2017
NYSE: NKE
NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate
$0.72
Annual Dividend Yield
1.35%
Consensus EPS Estimates² ($)
IBES consensus estimates are provided by Thomson Financial
0.50
2.40 E
2.55 E
Q4 FY17
2017(E)
2018(E)
INCOME STATEMENT
Net Sales ($mil)
EBITDA ($mil)
EBIT ($mil)
Net Income ($mil)
Q3 FY16
8,432.00
1,429.00
1,254.00
1,141.00
Q3 FY15
8,032.00
1,290.00
1,123.00
950.00
Q3 FY16
6,160.00
23,152.00
3,501.00
12,722.00
Q3 FY15
5,106.00
20,987.00
2,055.00
12,300.00
Q3 FY16
46.55%
16.94%
14.87%
1.46
17.61%
32.05%
Q3 FY15
48.01%
16.06%
13.98%
1.52
18.00%
30.72%
Q3 FY16
3.07
0.22
27.00
46.44
Q3 FY15
3.06
0.14
9.00
124.78
Q3 FY16
1,652
0.18
0.68
7.70
NA
9,837,970
Q3 FY15
1,685
0.16
0.55
7.30
NA
9,245,934
Beta
0.46
Market Capitalization
$70.3 Billion
52-Week Range
$49.01-$60.33
Price as of 6/8/2017
$53.20
FINANCIAL ANALYSIS
NIKE INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when
compared to the same period a year ago. The company has grown sales and net income during the past
quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth
of the average competitor within its industry. NIKE INC has strong liquidity. Currently, the Quick Ratio is 1.88
which shows the ability to cover short-term cash needs. The company managed to increase its liquidity from
the same period a year ago, despite already having strong liquidity to begin with. This would indicate
improved cash flow.
At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by
3.43% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely
to face financial difficulties in the near future.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
BALANCE SHEET
Cash & Equiv. ($mil)
Total Assets ($mil)
Total Debt ($mil)
Equity ($mil)
PROFITABILITY
Gross Profit Margin
EBITDA Margin
Operating Margin
Sales Turnover
Return on Assets
Return on Equity
DEBT
Current Ratio
Debt/Capital
Interest Expense
Interest Coverage
SHARE DATA
Shares outstanding (mil)
Div / share
EPS
Book value / share
Institutional Own %
Avg Daily Volume
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: June 11, 2017
PAGE 4
June 11, 2017
NYSE: NKE
NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate
$0.72
Annual Dividend Yield
1.35%
Beta
0.46
Market Capitalization
$70.3 Billion
52-Week Range
$49.01-$60.33
Price as of 6/8/2017
$53.20
RATINGS HISTORY
Our rating for NIKE INC has not changed since
9/22/2006. As of 6/8/2017, the stock was trading at a
price of $53.20 which is 11.8% below its 52-week
high of $60.33 and 8.5% above its 52-week low of
$49.01.
VALUATION
BUY. This stock's P/E ratio indicates a discount compared to an average of 29.58 for the Textiles, Apparel &
Luxury Goods industry and a discount compared to the S&P 500 average of 25.74. For additional comparison,
its price-to-book ratio of 6.91 indicates a significant premium versus the S&P 500 average of 3.09 and a
significant premium versus the industry average of 5.11. The current price-to-sales ratio is above both the
S&P 500 average and the industry average, indicating a premium.
2 Year Chart
Price/Earnings
BUY: $50.72
$70
$60
$50
2015
2016
1
2
3
premium
NKE 22.17
Peers 29.58
• Discount. A lower P/E ratio than its peers can
signify a less expensive stock or lower growth
expectations.
• NKE is trading at a significant discount to its peers.
Price/Projected Earnings
From
Buy
To
Buy
Price reflects the closing price as of the date listed, if available
5
1
2
3
4
5
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS
Price/Book
(as of 6/8/2017)
NKE 6.91
Peers 5.11
• Premium. A higher price-to-book ratio makes a
stock less attractive to investors seeking stocks
with lower market values per dollar of equity on the
balance sheet.
• NKE is trading at a significant premium to its peers.
43.85% Buy - We believe that this stock has the
opportunity to appreciate and produce a total return of
more than 10% over the next 12 months.
30.12% Hold - We do not believe this stock offers
conclusive evidence to warrant the purchase or sale of
shares at this time and that its likelihood of positive total
return is roughly in balance with the risk of loss.
26.02% Sell - We believe that this stock is likely to
decline by more than 10% over the next 12 months, with
the risk involved too great to compensate for any
possible returns.
TheStreet Ratings
14 Wall Street, 15th Floor
New York, NY 10005
www.thestreet.com
Research Contact: 212-321-5381
Sales Contact: 866-321-8726
2
3
premium
Price/Sales
1
2
premium
4
5
4
5
Price to Earnings/Growth
4
5
discount
1
2
3
premium
4
5
discount
NKE 2.00
Peers 2.24
• Discount. The PEG ratio is the stock’s P/E divided
by the consensus estimate of long-term earnings
growth. Faster growth can justify higher price
multiples.
• NKE trades at a discount to its peers.
Earnings Growth
1
2
3
4
lower
5
higher
NKE 11.11
Peers 12.30
• Average. Elevated earnings growth rates can lead
to capital appreciation and justify higher
price-to-earnings ratios.
• NKE is expected to keep pace with its peers on the
basis of earnings growth.
Sales Growth
discount
NKE 2.59
Peers 2.19
• Premium. In the absence of P/E and P/B multiples,
the price-to-sales ratio can display the value
investors are placing on each dollar of sales.
• NKE is trading at a premium to its industry on this
measurement.
3
NKE 22.44
Peers 17.25
• Premium. The P/CF ratio, a stock’s price divided by
the company's cash flow from operations, is useful
for comparing companies with different capital
requirements or financing structures.
• NKE is trading at a significant premium to its peers.
discount
3
2
premium
discount
NKE 20.86
Peers 20.95
• Average. An average price-to-projected earnings
ratio can signify an industry neutral stock price and
average future growth expectations.
• NKE is trading at a valuation on par with its peers.
1
1
Price/CashFlow
discount
premium
MOST RECENT RATINGS CHANGES
Date
Price
Action
6/8/15
$50.72 No Change
4
1
2
3
lower
4
5
higher
NKE 6.28
Peers 15.06
• Lower. A sales growth rate that trails the industry
implies that a company is losing market share.
• NKE significantly trails its peers on the basis of
sales growth
DISCLAIMER:
The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but
TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided
via the COMPUSTAT® Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as
other third-party data providers.
TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided
for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or
other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a
qualified securities professional, before you make any investment. None of the information contained in this report constitutes,
or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a
determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of
the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the
investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at
http://www.thestreet.com/static/about/terms-of-use.html.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: June 11, 2017
PAGE 5