Vladyslav Koptiev @AtlasCapital: "Ladies and gentlemen, Today we are..."

Malta

Ladies and gentlemen, Today we are presenting $NKE (NIKE) 𝗗𝗖𝗙 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 for your attention. Nike is experiencing its largest drop in history, with a -74% decline, and many analysts believe it is undervalued. However, we do not rely solely on analysts’ estimates. Instead, we create our own value assessment by constructing a DCF model based on the most realistic assumptions available. 𝗞𝗲𝘆 𝗮𝘀𝘀𝘂𝗺𝗽𝘁𝗶𝗼𝗻𝘀: * Explicit average 10Y growth @ 4% * Long-term growth in perpetuity @ 2.6%. Our Terminal value/Total EV is 67%, which is reasonable for a quality/stable consumer brand like Nike * EBITDA margin. As a starting point, we are using 8% calculated as average of 2025 and TTM 2026 given that margin pressure in 2026 is a combination of both cyclical + strategic reset factors. Over the explicit period, EBITDA margin moves back to 12-13% range (historical band). * WACC @ 8.8% * Adj. EBITDA exit multiple of 14. Since 67% of Nike’s revenue is derived from footwear, we are using average multiple for shoes industry * Tax rate 18% - in line with historical * The input that drives reinvestment is the most recent Sales to Capital ratio = 1.67, linearly regressed to the industry average rate of 1.45 in year 10 𝗛𝗶𝘀𝘁𝗼𝗿𝗶𝗰 𝗚𝗿𝗼𝘄𝘁𝗵 (𝗳𝗼𝗿 𝗰𝗼𝗻𝘁𝗲𝘅𝘁) Nike has achieved a 4% CAGR over the past decade. We see no indications that future growth will surpass this. Management hasn't set a clear long-term revenue CAGR target recently, unlike some competitors. However, their latest guidance and comments suggest a subdued near-term outlook with a gradual recovery, rather than a robust growth phase. 𝗠𝗼𝗮𝘁 Despite recent drops in ROIC, analysts generally believe Nike still warrants a wide moat rather than a narrow one. This view is mainly due to its strong intangible assets and demand-side scale. Nike's brand is among the most valuable worldwide, offering steady pricing power, premium status, and resilience through different economic cycles—features that few competitors can match at a large scale. Its extensive marketing efforts, driven by athlete endorsements and cultural relevance, sustain this edge over time. Furthermore, Nike’s direct-to-consumer platforms—such as apps, stores, and data—enhance customer loyalty and profit margins, while its large supply chain provides cost benefits. Although competitors like Adidas and new brands can cyclically challenge growth and margins, they do not fundamentally weaken Nike’s competitive strength. Overall, the enduring brand value, along with scale and distribution advantages, ensures sustained excess returns on capital for over ten years—characteristic of a wide moat. 𝗕𝗮𝘀𝗲 𝗰𝗮𝘀𝗲 CL price target for Nike is 44 $. Valuation suggests that the stock is trading at fair value. Below we list down why this scenario can work: * Strong brand moat supports earnings floor * Margin reset is partially cyclical, not fully structural * DTC shift supports long-term profitability * Expectations already reset (valuation compression done) * China risk is visible (and therefore partially discounted) * Cost discipline + restructuring optionality * Optional upside from innovation cycles Keep in mind that this is an estimate - just like any DCF model. I’m not claiming perfection, but I do trust these calculations to guide my own investments. Hopefully, they can help inform yours as well. ___________________________________ 𝐷𝑖𝑠𝑐𝑙𝑎𝑖𝑚𝑒𝑟: 𝑇ℎ𝑖𝑠 𝑝𝑜𝑠𝑡 𝑖𝑠 𝑓𝑜𝑟 𝑖𝑛𝑓𝑜𝑟𝑚𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑎𝑛𝑑 𝑒𝑑𝑢𝑐𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑝𝑢𝑟𝑝𝑜𝑠𝑒𝑠 𝑜𝑛𝑙𝑦. 𝐼 𝑑𝑜 𝑛𝑜𝑡 𝑜𝑤𝑛 𝑠ℎ𝑎𝑟𝑒𝑠 𝑖𝑛 𝑁𝐾𝐸 𝑏𝑢𝑡 𝑐𝑎𝑛 𝑏𝑢𝑦/𝑠𝑒𝑙𝑙 𝑡ℎ𝑒𝑚 𝑎𝑡 𝑎𝑛𝑦 𝑡𝑖𝑚𝑒 𝑎𝑓𝑡𝑒𝑟 𝑡ℎ𝑖𝑠 𝑝𝑜𝑠𝑡 𝑖𝑠 𝑝𝑢𝑏𝑙𝑖𝑠ℎ𝑒𝑑. 𝑁𝑜𝑡 𝑓𝑖𝑛𝑎𝑛𝑐𝑖𝑎𝑙 𝑎𝑑𝑣𝑖𝑐𝑒. 𝐷𝑜 𝑦𝑜𝑢𝑟 𝑜𝑤𝑛 𝑟𝑒𝑠𝑒𝑎𝑟𝑐ℎ. $SPX500 $ADS.DE (Adidas AG) $BTC $NSDQ100

Not investment advice. The author may have financial interests in the mentioned instruments.