February 28, 2016
NYSE: NKE
NIKE INC
BUY
A+
A
A-
HOLD
B+
B
Annual Dividend Rate
$0.64
B-
C+
C
Annual Dividend Yield
1.02%
SELL
C-
D+
D
Beta
0.62
Sector: Consumer Goods & Svcs
NKE BUSINESS DESCRIPTION
NIKE, Inc., together with its subsidiaries, designs,
develops, markets, and sells athletic footwear,
apparel, equipment, and accessories for men,
women, and kids worldwide.
Weekly Price: (US$)
D-
E+
E
E-
F
Market Capitalization
$84.2 Billion
Sub-Industry: Footwear
SMA (50)
BUY
52-Week Range
$47.25-$68.19
RATING SINCE
TARGET PRICE
02/25/2009
$81.87
Price as of 2/25/2016
$62.38
Source: S&P
SMA (100)
1 Year
2 Years
85
TARGET
PRICE
$81.87
TARGET
TARGETPRICE
PRICE$81.87
$81.87
TARGET
PRICE
$81.87
80
75
70
65
STOCK PERFORMANCE (%)
3 Mo.
Price Change
-6.99
1 Yr.
28.85
60
3 Yr (Ann)
32.16
55
50
GROWTH (%)
Last Qtr
4.14
19.84
21.62
Revenues
Net Income
EPS
RETURN ON EQUITY (%)
NKE
Q2 2015
27.00
Q2 2014
25.61
Q2 2013
23.54
12 Mo.
5.30
20.78
22.32
3 Yr CAGR
8.82
20.67
19.39
45
40
35
Rating History
BUY
Ind Avg
21.97
20.75
21.48
S&P 500
12.28
14.59
13.97
Volume in Millions
75
50
25
2014
2015
2016
0
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
P/E COMPARISON
RECOMMENDATION
We rate NIKE INC (NKE) a BUY. This is based on the convergence of positive investment measures, which
should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen
in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net
income, revenue growth, largely solid financial position with reasonable debt levels by most measures and
notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating
cash flow.
30.36
29.67
21.53
NKE
Ind Avg
S&P 500
EPS ANALYSIS¹ ($)
HIGHLIGHTS
NIKE INC has improved earnings per share by 21.6% 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 $1.85 versus $1.49 in the prior year. This year, the market expects an improvement in earnings
($2.15 versus $1.85).
2013
2014
Q2 0.45
Q1 0.67
Q4 0.49
Q3 0.45
Q2 0.37
Q1 0.55
Q4 0.39
Q3 0.38
Q2 0.30
Q1 0.43
The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is
less than that of the Textiles, Apparel & Luxury Goods industry average. The net income increased by 19.8%
when compared to the same quarter one year prior, going from $655.00 million to $785.00 million.
2015
NA = not available NM = not meaningful
1 Compustat fiscal year convention is used for all fundamental
data items.
NKE's revenue growth trails the industry average of 16.8%. Since the same quarter one year prior, revenues
slightly increased by 4.1%. This growth in revenue appears to have trickled down to the company's bottom
line, improving the earnings per share.
Although NKE's debt-to-equity ratio of 0.16 is very low, it is currently higher than that of the industry average.
To add to this, NKE has a quick ratio of 1.76, which demonstrates the ability of the company to cover
short-term liquidity needs.
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. When compared to other companies in the Textiles,
Apparel & Luxury Goods industry and the overall market, NIKE INC's return on equity exceeds that of the
industry average and significantly exceeds that of the S&P 500.
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) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 1
February 28, 2016
NYSE: NKE
NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate
$0.64
Annual Dividend Yield
1.02%
PEER GROUP ANALYSIS
35%
V
FA
AB
OR
DECK
LE
CHKE
R
VO
FA
LE
AB
-15%
UN
Revenue Growth (TTM)
NKE
-30%
ICON
CROX
40%
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 $17.1 Million and $84.2
Billion. Companies with NA or NM values do not
appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization.
REVENUE GROWTH AND EARNINGS YIELD
35%
52-Week Range
$47.25-$68.19
Price as of 2/25/2016
$62.38
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.
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), Crown Crafts (CRWS), and Hallwood Group (HWG). 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.
CTHR
COH
Market Capitalization
$84.2 Billion
INDUSTRY ANALYSIS
The textiles, apparel, and luxury goods industry includes very well-known brands such as Nike (NKE), Coach
(COH), Luxottica Group (LUX), Ralph Lauren (RL), Fossil (FOSL), Under Armour (UA), HanesBrands (HBI),
Columbia Sportswear (COLM), Crocs (CROX), and Movado Group (MOV).
REVENUE GROWTH AND EBITDA MARGIN*
WWW
Beta
0.62
SKX
PEER GROUP: Textiles, Apparel & Luxury Goods
Recent
Ticker
Company Name
Price ($)
NKE
NIKE INC
62.38
RCKY
ROCKY BRANDS INC
11.13
CROX
CROCS INC
9.86
SKX
SKECHERS U S A INC
33.00
ICON
ICONIX BRAND GROUP INC
8.29
SHOO
MADDEN STEVEN LTD
35.60
WWW
WOLVERINE WORLD WIDE
18.99
DECK
DECKERS OUTDOOR CORP
55.96
CTHR
CHARLES & COLVARD LTD
0.81
CHKE
CHEROKEE INC/DE
17.34
COH
COACH INC
38.90
Market
Cap ($M)
84,207
84
726
4,289
401
2,228
1,954
1,815
17
151
10,802
Price/
Earnings
30.36
12.79
NM
21.95
4.51
19.24
15.96
12.44
NM
17.52
29.47
Net Sales
TTM ($M)
31,339.00
269.30
1,088.43
3,147.32
390.67
1,421.89
2,691.60
1,837.20
29.58
34.35
4,237.50
Net Income
TTM ($M)
3,620.00
6.60
-66.12
231.91
96.00
112.94
122.80
147.38
-10.47
8.71
366.30
The peer group comparison is based on Major Footwear companies of comparable size.
V
FA
AB
OR
DECK
LE
NKE
SHOO
CHKE
WWW
COH
RCKY ICON
R
VO
FA
LE
AB
-15%
UN
Revenue Growth (TTM)
CTHR
-70%
CROX
30%
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 -10.8% and
32.4%. 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) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 2
February 28, 2016
NYSE: NKE
NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate
$0.64
Annual Dividend Yield
1.02%
Beta
0.62
Market Capitalization
$84.2 Billion
52-Week Range
$47.25-$68.19
Price as of 2/25/2016
$62.38
COMPANY DESCRIPTION
NIKE, Inc., together with its subsidiaries, designs,
develops, markets, and sells athletic footwear, apparel,
equipment, and accessories for men, women, and kids
worldwide. The company offers products in eight
categories, including running, basketball, football, men's
training, women's training, sportswear, action sports,
and golf under the NIKE and Jordan brand names. It 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, the company sells sports apparel
and accessories; and markets apparel with licensed
college and professional team and league logos. Further,
it 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; casual sneakers, apparel, and
accessories under the Converse, Chuck Taylor, All Star,
One Star, Star Chevron, and Jack Purcell trademarks; and
action sports and youth lifestyle apparel and accessories
under the Hurley trademark. NIKE, Inc. 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 a mix of 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.
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.
NIKE INC
One Bowerman Drive
Beaverton, OR 97005
USA
Phone: 503-671-6453
http://www.nikeinc.com
Income
out of 5 stars
weak
Measures dividend yield and payouts to shareholders. The company's
dividend is higher than 50% of the companies we track.
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
4.5
Total Return
out of 5 stars
weak
Measures the historical price movement of the stock. The stock
performance of this company has beaten 80% 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
5.0
Price volatility
out of 5 stars
weak
Measures the volatility of the company's stock price historically. The
stock is less volatile than 90% 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
3.0
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) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 3
February 28, 2016
NYSE: NKE
NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate
$0.64
Annual Dividend Yield
1.02%
Consensus EPS Estimates² ($)
IBES consensus estimates are provided by Thomson Financial
0.49
2.15 E
2.46 E
Q3 FY16
2016(E)
2017(E)
Market Capitalization
$84.2 Billion
52-Week Range
$47.25-$68.19
Price as of 2/25/2016
$62.38
FINANCIAL ANALYSIS
NIKE INC's gross profit margin for the second quarter of its fiscal year 2015 is essentially unchanged when
compared to the same period a year ago. The company has grown sales and net income during the past
quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth
of the average competitor within its industry. NIKE INC has strong liquidity. Currently, the Quick Ratio is 1.76
which shows the ability to cover short-term cash needs. The company's liquidity has increased from the
same period last year.
During the same period, stockholders' equity ("net worth") has increased by 14.57% from the same quarter last
year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the
near future.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
INCOME STATEMENT
Net Sales ($mil)
EBITDA ($mil)
EBIT ($mil)
Net Income ($mil)
Beta
0.62
Q2 FY15
7,686.00
1,101.00
941.00
785.00
Q2 FY14
7,380.00
1,043.00
889.00
655.00
Q2 FY15
6,116.00
22,583.00
2,171.00
13,405.00
Q2 FY14
4,713.00
19,167.00
1,287.00
11,700.00
Q2 FY15
47.63%
14.32%
12.24%
1.39
16.02%
27.00%
Q2 FY14
47.17%
14.13%
12.05%
1.55
15.63%
25.61%
Q2 FY15
3.04
0.14
7.00
134.43
Q2 FY14
2.84
0.10
11.00
80.82
Q2 FY15
1,707
0.14
0.45
7.85
NA
8,852,544
Q2 FY14
1,728
0.00
0.37
6.77
NA
4,446,668
BALANCE SHEET
Cash & Equiv. ($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) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 4
February 28, 2016
NYSE: NKE
NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate
$0.64
Annual Dividend Yield
1.02%
RATINGS HISTORY
Our rating for NIKE INC has not changed since
9/22/2006. As of 2/25/2016, the stock was trading at
a price of $62.38 which is 8.5% below its 52-week
high of $68.19 and 32.0% above its 52-week low of
$47.25.
2 Year Chart
Beta
0.62
BUY: $39.06
$70
Price/Earnings
$50
$40
52-Week Range
$47.25-$68.19
1
2
3
premium
4
5
NKE 30.36
Peers 29.67
• Average. An average P/E ratio can signify an
industry neutral price for a stock and an average
growth expectation.
• NKE is trading at a valuation on par with its peers.
Price/Projected Earnings
1
2
3
premium
From
Buy
To
Buy
Price reflects the closing price as of the date listed, if available
4
5
NKE 25.34
Peers 26.25
• Premium. A higher price-to-projected earnings ratio
than its peers can signify a more expensive stock
or higher future growth expectations.
• NKE is trading at a premium to its peers.
Price/Book
1
2
3
premium
32.19% 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.
35.29% 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.
32.52% 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
4
5
Price/Sales
1
2
premium
3
4
5
Price to Earnings/Growth
4
5
discount
1
2
3
premium
4
5
discount
NKE NM
Peers 1.84
• Neutral. 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's negative PEG ratio makes this valuation
measure meaningless.
Earnings Growth
1
2
3
4
lower
5
higher
NKE 22.32
Peers 17.27
• Higher. Elevated earnings growth rates can lead to
capital appreciation and justify higher
price-to-earnings ratios.
• NKE is expected to have an earnings growth rate
that significantly exceeds its peers.
Sales Growth
discount
NKE 3.40
Peers 2.75
• 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 23.78
Peers 26.92
• Discount. 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 discount to its peers.
discount
NKE 7.94
Peers 6.24
• 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.
2
premium
discount
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS
(as of 2/25/2016)
1
Price/CashFlow
discount
2015
MOST RECENT RATINGS CHANGES
Date
Price
Action
2/25/14
$39.06 No Change
Price as of 2/25/2016
$62.38
VALUATION
BUY. NIKE INC's P/E ratio indicates a premium compared to an average of 29.67 for the Textiles, Apparel &
Luxury Goods industry and a premium compared to the S&P 500 average of 21.53. For additional comparison,
its price-to-book ratio of 7.94 indicates a significant premium versus the S&P 500 average of 2.56 and a
significant premium versus the industry average of 6.24. The price-to-sales ratio is well above both the S&P
500 average and the industry average, indicating a premium. Upon assessment of these and other key
valuation criteria, NIKE INC proves to trade at a premium to investment alternatives within the industry.
$60
2014
Market Capitalization
$84.2 Billion
1
2
3
lower
4
5
higher
NKE 5.30
Peers 5.86
• Average. Comparing a company's sales growth to
its industry helps to determine if the company is
adding or losing market share.
• NKE is keeping pace with 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) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 5