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Discounted Cash Flow (DCF) Analysis Unlevered


Nike Inc.

Nike Inc. (NKE)

Consumer Cyclical

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 25,313.0027,798.7430,600.8532,375.7034,350.6236,397.9139,116.8442,066.2545,238.0448,648.9952,317.12
Revenue (%)
EBITDA 3,710.894,094.754,837.995,290.195,650.685,124.835,554.596,423.526,907.857,428.707,988.82
EBITDA (%)
EBIT 3,272.973,577.704,232.104,642.684,943.054,378.674,850.495,599.026,021.186,475.186,963.41
EBIT (%)
Depreciation 437.91517.06605.90647.51707.62746.16704.10824.50886.67953.521,025.42
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 5,963.745,142.775,924.325,458.546,179.685,244.944,662.736,945.147,468.808,031.958,637.56
Total Cash (%)
Account Receivables 3,116.033,433.143,356.913,240.813,675.523,497.844,271.564,526.334,867.615,234.635,629.32
Account Receivables (%)
Inventories 3,483.073,947.424,336.144,836.935,056.415,259.505,621.096,091.196,550.477,044.377,575.52
Inventories (%)
Accounts Payable 1,668.131,929.232,129.822,191.832,047.302,278.512,613.002,776.372,985.713,210.833,452.93
Accounts Payable (%)
Capital Expenditure -584.73-875.66-960.87-1,133.15-1,092.35-1,026.42-1,114.83-1,308.26-1,406.90-1,512.98-1,627.06
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 80.89
Diluted Shares Outstanding 1,618.40
Cost of Debt
Tax Rate 16.08
After-tax Cost of Debt -0.75
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.78
Total Debt 3,464.00
Total Equity 130,912.38
Total Capital 134,376.38
Debt Weighting 2.58
Equity Weighting 97.42
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 25,313.0027,798.7430,600.8532,375.7034,350.6236,397.9139,116.8442,066.2545,238.0448,648.9952,317.12
EBITDA 3,710.894,094.754,837.995,290.195,650.685,124.835,554.596,423.526,907.857,428.707,988.82
EBIT 3,272.973,577.704,232.104,642.684,943.054,378.674,850.495,599.026,021.186,475.186,963.41
Tax Rate 24.57%24.01%22.16%18.67%13.22%55.31%16.08%24.86%24.86%24.86%24.86%
EBIAT 2,468.962,718.613,294.093,776.004,289.511,956.994,070.534,207.134,524.344,865.485,232.34
Depreciation 437.91517.06605.90647.51707.62746.16704.10824.50886.67953.521,025.42
Accounts Receivable --317.1176.23116.11-434.71177.68-773.72-254.77-341.29-367.02-394.69
Inventories --464.35-388.72-500.79-219.48-203.09-361.59-470.10-459.28-493.91-531.15
Accounts Payable -261.11200.5962.02-144.54231.21334.50163.37209.34225.12242.10
Capital Expenditure -290.9385.21172.28-40.80-65.9388.41193.4398.64106.08114.08
UFCF 2,906.883,006.233,873.294,273.134,157.612,843.024,062.234,663.554,918.435,289.285,688.09
WACC
PV UFCF 4,021.293,938.223,932.743,927.26
SUM PV UFCF 28,824.25

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.69
Free cash flow (t + 1) 5,915.61
Terminal Value 160,314.74
Present Value of Terminal Value 110,686.98

Intrinsic Value

Enterprise Value 139,511.24
Net Debt -1,198.73
Equity Value 140,709.96
Shares Outstanding 1,618.40
Equity Value Per Share 86.94

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
9.69 (%) 44.95 Sell 48.30 Sell 52.51 Sell 57.99 Sell 65.39 Sell 75.94 Sell 92.22 Buy 120.60 Buy 182.56 Buy
9.19 (%) 43.07 Sell 46.02 Sell 49.70 Sell 54.39 Sell 60.60 Sell 69.21 Sell 81.92 Buy 102.60 Buy 142.16 Buy
8.69 (%) 41.38 Sell 44.00 Sell 47.22 Sell 51.28 Sell 56.56 Sell 63.68 Sell 73.85 Sell 89.52 Buy 116.85 Buy
8.19 (%) 39.86 Sell 42.19 Sell 45.04 Sell 48.57 Sell 53.10 Sell 59.08 Sell 67.36 Sell 79.61 Sell 99.53 Buy
7.69 (%) 38.48 Sell 40.57 Sell 43.09 Sell 46.20 Sell 50.11 Sell 55.19 Sell 62.05 Sell 71.84 Sell 86.94 Buy
7.19 (%) 37.22 Sell 39.10 Sell 41.35 Sell 44.09 Sell 47.50 Sell 51.86 Sell 57.62 Sell 65.61 Sell 77.40 Sell
6.69 (%) 36.08 Sell 37.78 Sell 39.79 Sell 42.22 Sell 45.21 Sell 48.98 Sell 53.88 Sell 60.49 Sell 69.93 Sell
6.19 (%) 35.03 Sell 36.57 Sell 38.38 Sell 40.55 Sell 43.19 Sell 46.48 Sell 50.68 Sell 56.23 Sell 63.93 Sell
5.69 (%) 34.07 Sell 35.47 Sell 37.11 Sell 39.05 Sell 41.39 Sell 44.28 Sell 47.91 Sell 52.63 Sell 59.01 Sell