nike, inc

Contents Page
Executive Summary 2
Nike Inc. 2
Footwear Industry 3 Analyzing a Footwear Company.................................................................3 Trends in the Footwear Industry…………………………………………4

Nike’s Strategic Enablers in Gaining Competitive Advantage 4 Marketing & Promotion…………………………………………………...4 Production & Distribution………………………………………………...5 R&D………………………………………………………………………...5 Acquisition Strategy………………………………………………………..5

Nike’s SWOT Analysis 6 Strengths……………………………………………………………………6 Weakness……………………………………………………………………7 Opportunities……………………………………………………………….8 Threats………………………………………………………………………9

Nike’s Geographic Markets and Growth Prospects 9 China………………………………………………………………………..10 Emerging Markets…………………………………………………………11 Mature Markets……………………………………………………………12 Nike’s Financial Health 12

Valuation Assumptions 13

Nike’s Valuation 13 FCFF………………………………………………………………………..14 FCFE ……………………………………………………………………….15
Relative Valuation………………………………………………………….16

Summary 16

References 17
Appendix 18
Endnotes 21

Executive Summery

Nike with its strong brand image is poised to do very well in the present economy that is coming out of recession. I strongly recommend holding Nike in both portfolios (D.A. Davidson & CFASP) even though it has been trading at 52 week highs. My recommendation is based on the following:
• Analysis of growth opportunities in emerging markets
• Nike’s strong brand recognition
• Nike’s exceptional marketing & distribution reach, its ability to use resources efficiently and its strong financial position.
Based on my valuation detailed below the stock is 17% undervalued with an intrinsic value of $93.96, against the current market price of $80.00.

Nike, Inc.

Nike is the world's leading producer and supplier of athletic shoes, apparel and sports equipment (with an