July 16, 2017

NYSE: NKE

NIKE INC
BUY HOLD SELL

BUY
RATING SINCE 07/13/2010
A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F TARGET PRICE $66.92

Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$0.72 1.24% 0.59 $76.6 Billion $49.01-$60.33 $57.94

Sector: Consumer Goods & Svcs Sub-Industry: Footwear Source: S&P

Weekly Price: (US$) SMA (50) SMA (100) 1 Year 2 Years
NKE BUSINESS DESCRIPTION
NIKE, Inc., together with its subsidiaries, designs, 68
develops, markets, and sells athletic footwear, TARGET
TARGET
TARGETPRICE
PRICE
PRICE$66.92
$66.92
$66.92 66
apparel, equipment, and accessories worldwide. 64
62
STOCK PERFORMANCE (%)
3 Mo. 1 Yr. 3 Yr (Ann) 60
Price Change 4.69 -0.09 14.45 58
56
GROWTH (%)
54
Last Qtr 12 Mo. 3 Yr CAGR
Revenues 5.25 6.09 7.31 52
Net Income 19.14 12.76 16.33 50
EPS 22.44 16.20 18.98 48
Rating History
RETURN ON EQUITY (%) BUY
NKE Ind Avg S&P 500
Volume in Millions
Q4 2016 34.17 25.11 13.16 200
Q4 2015 30.67 24.67 11.83
Q4 2014 25.75 22.12 13.71 100

0
P/E COMPARISON 2015 2016 2017
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History

RECOMMENDATION
We rate NIKE INC (NKE) a BUY. This is driven by some important positives, which we believe should have a
greater impact than any weaknesses, and should give investors a better performance opportunity than most
stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely
solid financial position with reasonable debt levels by most measures, notable return on equity, increase in
net income and expanding profit margins. We feel its strengths outweigh the fact that the company has had
23.08 28.88 24.41 lackluster performance in the stock itself.
NKE Ind Avg S&P 500
HIGHLIGHTS
Despite its growing revenue, the company underperformed as compared with the industry average of 9.5%.
EPS ANALYSIS¹ ($) Since the same quarter one year prior, revenues slightly increased by 5.3%. Growth in the company's revenue
appears to have helped boost the earnings per share.

The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been
successful management of debt levels. To add to this, NKE has a quick ratio of 1.80, 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
Q1 0.55
Q2 0.37
Q3 0.45
Q4 0.49

Q1 0.67
Q2 0.45
Q3 0.55
Q4 0.49

Q1 0.73
Q2 0.50
Q3 0.68
Q4 0.60

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
2014 2015 2016 industry average and significantly exceeds that of the S&P 500.
NA = not available NM = not meaningful
The net income growth from the same quarter one year ago has exceeded that of the Textiles, Apparel &
1 Compustat fiscal year convention is used for all fundamental
data items. Luxury Goods industry average, but is less than that of the S&P 500. The net income increased by 19.1% when
compared to the same quarter one year prior, going from $846.00 million to $1,008.00 million.

44.06% is the gross profit margin for NIKE INC which we consider to be strong. Regardless of NKE's high
profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the
gross profit margin, NKE's net profit margin of 11.61% compares favorably to the industry average.

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 Report Date: July 16, 2017 PAGE 1
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NYSE: NKE

NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$0.72 1.24% 0.59 $76.6 Billion $49.01-$60.33 $57.94

PEER GROUP ANALYSIS INDUSTRY ANALYSIS

REVENUE GROWTH AND EBITDA MARGIN*
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),
20%

CHKE Columbia Sportswear (COLM), Crocs (CROX), and Movado Group (MOV).
FA
VO

The companies in the textiles, apparel, and luxury goods industry sell their products through multiline
RA

SKX
BL

retailers and over the internet. Some of the larger players in this industry group cross over into the specialty
E

COH retailer category with exclusively branded stores of their own such as Nike, Coach, Fossil, and Ralph Lauren.
RCKY SHOO
While textiles may have once been a large portion of this industry group, that segment is down to a few
WWW players such as Unifi (UFI), Culp (CFI), and Crown Crafts (CRWS). Most of the industry is focused on brands for
DECK ICON
Revenue Growth (TTM)

CROX 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.
UN
FA
VO

PEER GROUP: Textiles, Apparel & Luxury Goods

-25%

RA
B

Recent Market Price/ Net Sales Net Income

LE

CTHR
-20% CTHR 70% Ticker Company Name Price ($) Cap ($M) Earnings TTM ($M) TTM ($M)
EBITDA Margin (TTM) NKE NIKE INC 57.94 76,569 23.08 34,350.00 4,240.00
Companies with higher EBITDA margins and RCKY ROCKY BRANDS INC 12.90 96 NM 265.80 -0.45
revenue growth rates are outperforming companies CHKE CHEROKEE INC/DE 6.00 78 NM 41.06 -13.77
with lower EBITDA margins and revenue growth CROX CROCS INC 7.54 559 NM 1,025.04 -15.63
rates. Companies for this scatter plot have a market SKX SKECHERS U S A INC 28.38 3,797 18.43 3,657.33 239.88
capitalization between $18.4 Million and $76.6 ICON ICONIX BRAND GROUP INC 6.45 368 NM 332.55 -275.03
Billion. Companies with NA or NM values do not
WWW WOLVERINE WORLD WIDE 27.38 2,653 31.11 2,508.30 87.00
appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
SHOO MADDEN STEVEN LTD 38.80 2,307 19.40 1,450.22 117.41
Amortization. DECK DECKERS OUTDOOR CORP 65.32 2,090 435.47 1,790.15 5.71
REVENUE GROWTH AND EARNINGS YIELD CTHR CHARLES & COLVARD LTD 0.85 18 NM 23.42 -3.78
COH COACH INC 47.44 13,337 25.64 4,509.10 520.80
20%

CHKE The peer group comparison is based on Major Footwear companies of comparable size.
FA
VO
RA

SKX
BL
E

NKE
COH
SHOO
RCKY

ICON DECK
WWW
Revenue Growth (TTM)

CROX
UN
FA
VO
-25%

RA
B
LE

-80% CTHR 10%

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 -22.1% and
17%. 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 Report Date: July 16, 2017 PAGE 2
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NYSE: NKE

NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$0.72 1.24% 0.59 $76.6 Billion $49.01-$60.33 $57.94

COMPANY DESCRIPTION STOCK-AT-A-GLANCE

NIKE, Inc., together with its subsidiaries, designs, Below is a summary of the major fundamental and technical factors we consider when determining our
develops, markets, and sells athletic footwear, apparel, overall recommendation of NKE shares. It is provided in order to give you a deeper understanding of our
equipment, and accessories worldwide. It offers products rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
in nine categories, including running, NIKE basketball, important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
the Jordan brand, football, men's training, women's understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
training, action sports, sportswear, and golf. The valuation. Please refer to our Valuation section on page 5 for further information.
company also markets products designed for kids, as
well as for other athletic and recreational uses, such as FACTOR SCORE
cricket, lacrosse, tennis, volleyball, wrestling, walking,
and outdoor activities. In addition, it sells sports apparel; Growth out of 5 stars 4.5
and markets apparel with licensed college and Measures the growth of both the company's income statement and weak strong
professional team and league logos. Further, the cash flow. On this factor, NKE has a growth score better than 80% of
company sells a line of performance equipment, the stocks we rate.
including bags, socks, sport balls, eyewear, timepieces,
digital devices, bats, gloves, protective equipment, golf
clubs, and other equipment under the NIKE brand name
Total Return out of 5 stars 3.0
for sports activities; various plastic products to other Measures the historical price movement of the stock. The stock weak strong
manufacturers; athletic and casual footwear, apparel, performance of this company has beaten 50% of the companies we
and accessories under the Jumpman trademark; action cover.
sports and youth lifestyle apparel and accessories under
the Hurley trademark; and casual sneakers, apparel, and Efficiency out of 5 stars 5.0
accessories under the Converse, Chuck Taylor, All Star, Measures the strength and historic growth of a company's return on weak strong
One Star, Star Chevron, and Jack Purcell trademarks. invested capital. The company has generated more income per dollar of
Additionally, it licenses agreements that permit capital than 90% of the companies we review.
unaffiliated parties to manufacture and sell apparel,
digital devices, and applications and other equipment for
sports activities under NIKE-owned trademarks. The
Price volatility out of 5 stars 4.0
company sells its products to footwear stores, sporting Measures the volatility of the company's stock price historically. The weak strong
goods stores, athletic specialty stores, department stock is less volatile than 70% of the stocks we monitor.
stores, skate, tennis and golf shops, and other retail
accounts through NIKE-owned retail stores and Internet Solvency out of 5 stars 5.0
Websites (direct to consumer operations), as well as Measures the solvency of the company based on several ratios. The weak strong
independent distributors and licensees. The company company is more solvent than 90% of the companies we analyze.
was formerly known as Blue Ribbon Sports, Inc. and
changed its name to NIKE, Inc. in 1971. NIKE, Inc. was Income out of 5 stars 3.5
founded in 1964 and is headquartered in Beaverton,
Measures dividend yield and payouts to shareholders. The company's weak strong
Oregon.
dividend is higher than 60% of the companies we track.
NIKE INC
One Bowerman Drive THESTREET RATINGS RESEARCH METHODOLOGY
Beaverton, OR 97005
USA TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
Phone: 503-671-6453 price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
http://www.nike.com 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 Report Date: July 16, 2017 PAGE 3
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NYSE: NKE

NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$0.72 1.24% 0.59 $76.6 Billion $49.01-$60.33 $57.94

Consensus EPS Estimates² ($) FINANCIAL ANALYSIS

IBES consensus estimates are provided by Thomson Financial
NIKE INC's gross profit margin for the fourth quarter of its fiscal year 2016 has decreased when compared to
the same period a year ago. The company has grown its sales and net income during the past quarter when
compared with the same quarter a year ago, and although its growth in net income has outpaced the industry
average, its revenue growth has not. NIKE INC has strong liquidity. Currently, the Quick Ratio is 1.80 which
shows the ability to cover short-term cash needs. The company managed to increase its liquidity from the
same period a year ago, despite already having strong liquidity to begin with. This would indicate improved
cash flow.

0.48 2.42 E 2.78 E At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by
Q1 FY17 2018(E) 2019(E) 1.21% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely
to face financial difficulties in the near future.

INCOME STATEMENT STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
Q4 FY16 Q4 FY15 next 12-months. To learn more visit www.TheStreetRatings.com.
Net Sales ($mil) 8,677.00 8,244.00
EBITDA ($mil) NA 1,188.00
EBIT ($mil) 1,158.00 1,020.00
Net Income ($mil) 1,008.00 846.00

BALANCE SHEET
Q4 FY16 Q4 FY15
Cash & Equiv. ($mil) 6,179.00 5,457.00
Total Assets ($mil) 23,259.00 21,396.00
Total Debt ($mil) 3,802.00 2,070.00
Equity ($mil) 12,407.00 12,258.00

PROFITABILITY
Q4 FY16 Q4 FY15
Gross Profit Margin 44.06% 47.96%
EBITDA Margin NA 14.41%
Operating Margin 13.35% 12.37%
Sales Turnover 1.48 1.51
Return on Assets 18.22% 17.57%
Return on Equity 34.17% 30.67%

DEBT
Q4 FY16 Q4 FY15
Current Ratio 2.93 2.80
Debt/Capital 0.23 0.14
Interest Expense NA 9.00
Interest Coverage NA 113.33

SHARE DATA
Q4 FY16 Q4 FY15
Shares outstanding (mil) 1,652 1,682
Div / share 0.18 0.16
EPS 0.60 0.49
Book value / share 7.51 7.29
Institutional Own % NA NA
Avg Daily Volume 10,468,920 9,281,185
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 Report Date: July 16, 2017 PAGE 4
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NYSE: NKE

NIKE INC
Sector: Consumer Goods & Svcs Footwear Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$0.72 1.24% 0.59 $76.6 Billion $49.01-$60.33 $57.94

RATINGS HISTORY VALUATION

Our rating for NIKE INC has not changed since
9/22/2006. As of 7/13/2017, the stock was trading at
a price of $57.94 which is 4.0% below its 52-week
high of $60.33 and 18.2% above its 52-week low of
$49.01.
BUY. NIKE INC's P/E ratio indicates a discount compared to an average of 28.88 for the Textiles, Apparel &
Luxury Goods industry and a value on par with the S&P 500 average of 24.41. For additional comparison, its
price-to-book ratio of 7.71 indicates a significant premium versus the S&P 500 average of 3.04 and a
significant premium versus the industry average of 5.61. The price-to-sales ratio is well above both the S&P
500 average and the industry average, indicating a premium.

2 Year Chart
$70 Price/Earnings 1 2 3 4 5 Price/CashFlow 1 2 3 4 5
BUY: $56.21

premium discount premium discount

NKE 23.08 Peers 28.88 NKE NA Peers 13.73
$60 • Discount. A lower P/E ratio than its peers can • Neutral. The P/CF ratio is the stock’s price divided
signify a less expensive stock or lower growth by the sum of the company's cash flow from
$50 expectations. operations. It is useful for comparing companies
• NKE is trading at a discount to its peers. with different capital requirements or financing
structures.
2015 2016 • Ratio not available.

Price/Projected Earnings 1 2 3 4 5 Price to Earnings/Growth 1 2 3 4 5

premium discount premium discount
MOST RECENT RATINGS CHANGES NKE 20.86 Peers 20.59 NKE NM Peers 2.11
Date Price Action From To • Premium. A higher price-to-projected earnings ratio • Neutral. The PEG ratio is the stock’s P/E divided by
7/13/15 $56.21 No Change Buy Buy than its peers can signify a more expensive stock the consensus estimate of long-term earnings
Price reflects the closing price as of the date listed, if available or higher future growth expectations. growth. Faster growth can justify higher price
• NKE is trading at a premium to its peers. multiples.
• NKE's negative PEG ratio makes this valuation
RATINGS DEFINITIONS &
measure meaningless.
DISTRIBUTION OF THESTREET RATINGS
(as of 7/13/2017) Price/Book 1 2 3 4 5 Earnings Growth 1 2 3 4 5
premium discount lower higher
43.81% Buy - We believe that this stock has the NKE 7.71 Peers 5.61 NKE 16.20 Peers 12.78
opportunity to appreciate and produce a total return of • Premium. A higher price-to-book ratio makes a • Higher. Elevated earnings growth rates can lead to
more than 10% over the next 12 months. stock less attractive to investors seeking stocks capital appreciation and justify higher
with lower market values per dollar of equity on the price-to-earnings ratios.
30.69% Hold - We do not believe this stock offers balance sheet. • NKE is expected to have an earnings growth rate
conclusive evidence to warrant the purchase or sale of • NKE is trading at a significant premium to its peers. that significantly exceeds its peers.
shares at this time and that its likelihood of positive total
return is roughly in balance with the risk of loss. Price/Sales 1 2 3 4 5 Sales Growth 1 2 3 4 5
premium discount lower higher
25.50% Sell - We believe that this stock is likely to NKE 2.79 Peers 2.20 NKE 6.09 Peers 16.79
decline by more than 10% over the next 12 months, with • Premium. In the absence of P/E and P/B multiples, • Lower. A sales growth rate that trails the industry
the risk involved too great to compensate for any the price-to-sales ratio can display the value implies that a company is losing market share.
possible returns. investors are placing on each dollar of sales. • NKE significantly trails its peers on the basis of
• NKE is trading at a significant premium to its sales growth
industry.
TheStreet Ratings
14 Wall Street, 15th Floor DISCLAIMER:
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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 Report Date: July 16, 2017 PAGE 5
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.