Inter Milan Fans: Buy Nike?

Not right now, as Nike is trading well above our US$ 118 fair value estimate

Ruth Saldanha 9 June, 2021 | 2:55AM
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Ian Tam: Inter Milan is a soccer team based in, well, Milan. 

Francesco Lavecchia: I am an Inter Milan fan and we are going to win the next Champions League, hopefully. 

Tam: Well, you're clearly invested in this and I hope that Inter Milan wins. But do you think that you can invest in the team in another way? Perhaps you can invest in Nike, one of their principal sponsors. If you did, would you be a champion? Nike is a leader in athletic apparel. Its stock is trading at around US$137, above our fair value estimate of US$118. It has a wide economic moat.

David Swartz: We view Nike as the leader in the worldwide athletic apparel and footwear market. In fact, it is the only company in this sector awarded a wide mode by Morningstar. Nike sponsors more athletes and sports teams and leagues than anybody else, which we believe strengthens its brand intangible asset. There has been a big surge in sales of athletic gear during the pandemic, and Nike has been a major beneficiary. However, its share price is more than doubled for its March 2020 low. Trading above our $118 fair value estimate, we now have it rated at 2-Stars.

Tam: If you want to invest in Inter Milan via Nike, your portfolio might just swoosh to victory.

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About Author

Ruth Saldanha

Ruth Saldanha  is Senior Editor at Morningstar.ca. Follow her on Twitter @KarishmaRuth.

 
 
 

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