St John's Student Managed

Expenditure Research Collateral Research

NIKE (NKE)

April 4, 2005 Recommendation: Sector: Industry: PURCHASE

Consumer Cyclical Footwear seventy six. 64 78. 56 forty-nine. 60 263. 12M. 85 20. 17B 10, 697M 21. 66% $94. 85

Price: 52 – Week High: 52 – Week Low: Shares Out (mil): Dividend: Market Cap: the year 2003 Revenue: Job EPS Progress: 2005 Focus on Price:

Illustrates

Rudy Dermesropian [email protected] com Jason A. Drago [email protected] edu Gintare Grigaite Gintare. [email protected] edu Tennille Lopez Tennille. [email protected] edu • • The stock happens to be undervalued in a price of $76. sixty four. Our june 2006 target price are $94. eighty-five. In the year 2003, NIKE reported revenues of $10. several billion, a great 8 percent increase from FY'02. The very best year of the company's 31-year history. NIKE is rated # one particular in the footwear industry NIKE's Market Increased is 20. 17B when compared to 2 . 49B of leading competitor Reebok and 334. 60M for the whole Industry. Net gain had grown 61% as demand for sneakers surged in March of 2004.

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Executive Brief summary:

We are suggesting the getting 150 of shares of NIKE on limit purchase at seventy dollars and one hundred and fifty shares in market purchase for the next reasons: • • • • We now have set the point price for $94. 85, based on each of our P/E average of 24. 70 simply by our 2005 estimated EPS of $3. 84 The stock is currently undervalued for a price of 76. sixty four (April fourth 2003). Each of our calculations show that Nike's intrinsic benefit is $88. 10 The continuous increase in dividends through the entire years The 21% embrace third quarter revenues and the expectation of higher figures to get the overall 12 months.

Company Information:

NIKE, Incorporation. is involved in the design, expansion and throughout the world marketing of footwear, clothing, equipment and accessory items. It sells its products to approximately 18, 000 price tag accounts in america and through a mix of independent distributors, licensees and subsidiaries in practically 200 countries. NIKE's athletic footwear items are designed for specific athletic employ, although some of its products will be worn intended for casual or leisure reasons. The Company makes designs for guys, women and children. Running, golf ball, children's, cross-training and can certainly shoes will be the Company's top-selling product types. NIKE likewise markets shoes or boots designed for adventures, tennis, golf, soccer, snowboarding, football, bicycling, volleyball, struggling, cheerleading, aquatic activities, walking and other athletic and recreational uses. NIKE sells lively sports clothes that protects most of these categories, athletically motivated lifestyle attire and others. Index membership: S& P 500 Sector: Consumer Cyclical Market: Footwear Employees: 23, three hundred

History:

1957: Phil Dark night and Invoice Bowerman meet up with at the School of Or 1962: Phil cannella Knight and Bill Bowerman founded Green Ribbon Athletics with the aim of making quality American shoes or boots and started out by selling their shoes coming from a car at the side of tracks to athletes and people who are interested 1963: Sold sneakers from a manufacturer in Japan referred to as Onitsuka Tiger 1972: Term changed to NIKE Inc, that was derived from the Greek empress of actually paid only $35 on her behalf design. The team also persuaded marathon runners at Olympic Trails to put on NIKE shoes and this ended in strong promoting especially when a lot of runners were some of the leading finishers. Recognition continued to grow through the 70s lates 1970s: By this time NIKE had 50 percent of the ALL OF US running shoe marketplace 1980: NIKE goes community 1988: Famous slogan " Just do it” introduced and company bought Cole Haan. Throughout their existence, NIKE endorsed and sponsored distinct athletes like Michael Jordan the popular basketball person or Sergio garcia the small outstanding the game of golf player 1995: NIKE obtained a license to place its logo on NFL uniforms

1992: Opens it first NIKETOWN store as well as years after, it obtained Canstar Sports, which included dance shoes equipment developer Bauer. 97: NIKE released the Michael jordan brand of tennis shoes and...

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