A Financial Valuation of Nike, Inc.

This research focuses on Nike, Inc., an American multinational corporation and global leader in the design, marketing, and sale of athletic footwear, apparel, and equipment. The study executes a financial valuation of Nike with the objective of estimating its intrinsic value and comparing it with the market value as of May 31st, 2023. The analysis combines a review of the company's overall strategic positioning in the industry and its historical financial performance. The methodology involved the reorganization of financial statements, the calculation of key financial metrics (NOPLAT, FCF, ROIC), the estimation of the cost of capital (WACC) using CAPM, and the application of valuation models based on discounted cash flows (Enterprise DCF, APV, DEP). The results imply that, as of May 31st, 2023, Nike's estimated intrinsic value was between $54.94 and $59.23 per share. Comparing this to the market price of $105.26 on the same date, the analysis concludes that Nike shares were significantly overvalued. The sensitivity analysis highlighted the vulnerability of the valuation to changes in the market risk premium and the perpetual growth rate. It is concluded that, despite Nike's strong market position, effective management of external risks, and maintenance of financial discipline are crucial to its future value.