Cover

x Agenda
1. Chipotle Situation Overview
2. Trading Comps
3. Street-Based DCF
4. Calculating Diluted Share Count
5. WACC, Mid-Year Convention
6. Sensitivity Tables
7. Price discussion

x Situation Overview
The Bull Case
1. Digital sales growth via its apps and ride delivery
2. Domestic and international expansion opportunities
3. Customer loyalty due to high-quality, fresh ingredients

The Bear Case

1. Rising labor and food costs can pressure margins
2. Tough competitive landscape in fast-casual dining sector
3. Susceptible to black swan events like disruptions to supply chains, economic downturns, food safety issues

x Notes
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This is a HIGH-LEVEL, street-based DCF and NOT financial advice

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71QplJWp1Rrm0dkWjjIY2cf4jTYSU0t2
 NIKE INC DCF
Ticker NKE CMP $78.59
Date 5/1/2025 Intrinsic Value $78.32
Year end 12/31/2025 Upside/ Downside -0.34%

x Assumptions
Switches Base Optimistic
Assumptions Metric Assumptions Year Metric Assumptions Year Metric
Revenue (15.0%) Revenue '26-'30 4.9% Revenue '26-'30 20.0%
EBIT (6.8%) EBIT '26-'30 3.2% EBIT '26-'30 13.2%
WACC
TGR

Valuation
WACC 8.6% WACC 8.1% WACC 7.6%
TGR 1.8% TGR 2.3% TGR 2.8%

x Income Statement $'000s 2021A 2022A 2023A 2024A 2025A 2026E 2027E 2028E 2029E 2030E
Revenue 44,538,000 46,710,000 51,217,000 51,362,000 48,978,000 46,815,000 49,492,000 52,157,000 53,940,000 57,176,000
% growth - 4.88% 9.65% 0.28% (4.64%) (4.42%) 5.72% 5.38% 3.42% 6.00%

EBIT 6,937,000 6,675,000 5,915,000 6,311,000 5,475,000 5,752,297 5,939,040 5,737,270 5,933,400 5,717,600
% of sales 15.58% 14.29% 11.55% 12.29% 11.18% 12.29% 12.00% 11.00% 11.00% 10.00%
-4% -11% 7% -13% 5% 3% -3% 3% -4%
Taxes 934,000 605,000 1,131,000 1,000,000 967,000 1,009,113 1,041,873 1,008,758 1,041,670 1,004,037
Tax rate 13% 9% 19% 16% 18% 18% 18% 18% 18% 18%

x Cash Flow Items $'000s 2021A 2022A 2023A 2024A 2025A 2026E 2027E 2028E 2029E 2030E
D&A 797,000 840,000 859,000 844,000 843,000 786,741 831,729 876,515 906,479 960,861
% of sales 1.79% 1.80% 1.68% 1.64% 1.72% 1.68% 1.68% 1.68% 1.68% 1.68%

CapEx 695,000 758,000 969,000 812,000 603,000 740,115 782,437 824,568 852,757 903,916
% of sales 1.56% 1.62% 1.89% 1.58% 1.23% 1.58% 1.58% 1.58% 1.58% 1.58%

Change in NWC 45,000 (1,660,000) (513,000) 716,000 197,000 -360,234 432,889 430,949 288,323 523,284
% of sales 0.10% (3.55%) (1.00%) 1.39% 0.40% (0.77%) 0.87% 0.83% 0.53% 0.92%
% of change in sales (76.43%) (11.38%) 493.79% (8.26%) 16.65% 16.17% 16.17% 16.17% 16.17%

x DCF $'000s 2021A 2022A 2023A 2024A 2025A 2026E 2027E 2028E 2029E 2030E
Revenue 44,538,000 46,710,000 51,217,000 51,362,000 48,978,000 46,815,000 49,492,000 52,460,093 55,759,613 59,437,687
% growth - 4.88% 9.65% 0.28% (4.64%) (4.42%) 5.72% 6.00% 6.29% 6.60%
Conservative -4% 5% 5% 5% 6%
Base (Street) -4% 6% 6% 6% 7%
Optimistic -4% 7% 7% 8% 8%

EBIT 6,937,000 6,675,000 5,915,000 6,311,000 5,475,000 5,752,297 5,939,040 6,499,580 7,132,650 7,849,971
% of sales 16% 14% 12% 12% 11% 12% 12% 12% 13% 13%
Conservative 12% 11% 12% 12% 12%
Base (Street) 12% 12% 12% 13% 13%
Optimistic 12% 14% 14% 14% 15%

Taxes 934,000 605,000 1,131,000 1,000,000 967,000 1,009,113 1,041,873 1,140,207 1,251,265 1,377,103
Tax rate 13% 9% 19% 16% 18% 18% 18% 18% 18% 18%

EBIAT 4,743,184 4,897,167 5,359,373 5,881,385 6,472,868

D&A 797,000 840,000 859,000 844,000 843,000 786,741 831,729 881,609 937,058 998,869
% of sales 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%

CapEx 695,000 758,000 969,000 812,000 603,000 734,067 776,043 822,583 874,320 931,993
% of sales 2% 2% 2% 2% 1% 2% 2% 2% 2% 2%

Change in NWC 45,000 (1,660,000) (513,000) 716,000 197,000 -360,234 432,889 430,949 288,323 523,284
% of sales 0% (4%) (1%) 1% 0% 0% 0% 0% 0% 0%

Unlevered FCF 5,156,093 4,519,964 4,987,450 5,655,800 6,016,461

PV of Unlevered FCF 3,349,344 4,127,539 4,213,333 4,420,103 4,349,812

Period 0.67
Discount Period 0.33 1.17 2.17 3.17 4.17

Terminal Value 106,194,261

PV of Terminal Value 96,594,539

Enterprise Value 117,054,671

(-) Debt 10,469,000
(+) Cash 11,582,000
Equity Value 118,167,671
FDSO 1,508,800
Implied Price per Share $78.32
x Nike Inc CMP $78.59

Items TTM 5/31/2024 5/31/2023

Total Revenue 48,978,000 51,362,000 51,217,000

Cost of Revenue 27,136,000 28,475,000 28,925,000

COGS Margin 55% 55% 56%
Gross Profit 21,842,000 22,887,000 22,292,000

Operating Expense 16,367,000 16,576,000 16,377,000

EBITDA 6,318,000 7,155,000 6,774,000

D&A 843,000 844,000 859,000

EBIT 5,475,000 6,311,000 5,915,000

Pretax Income 5,853,000 6,700,000 6,201,000

Tax 967,000 1,000,000 1,131,000

Net Income Common Stockholders 4,886,000 5,700,000 5,070,000

Basic Average Shares 1,501,450 1,517,600 1,551,600

Diluted Average Shares 1,508,800 1,529,700 1,569,800
5/31/2022 5/31/2021
46,710,000 44,538,000

25,231,000 24,576,000
54% 55%
21,479,000 19,962,000

14,804,000 13,025,000

7,515,000 7,734,000

840,000 797,000

6,675,000 6,937,000

6,651,000 6,661,000

605,000 934,000

6,046,000 5,727,000

1,578,800 1,573,000
1,610,800 1,609,400
x
Items 2026E 2027E 2028E 2029E 2030E
Revenue 46,815,000 49,492,000 52,157,000 53,940,000 57,176,000

COGS 25,748,250 27,220,600 28,686,350 29,667,000 31,446,800

COGS Margin 55% 55% 55% 55% 55%
 FCFF 2026E 2027E 2028E 2029E 2030E

WACC
Unlevered FC 5,156,093 4,519,964 4,987,450 5,655,800 6,016,461
8.60% PV2 3,344,196 4,105,376 4,171,415 4,355,979 4,266,971
8.35% PV 1 3,346,766 4,116,430 4,192,297 4,387,887 4,308,145
8.10% PV BASE 3,349,344 4,127,539 4,213,333 4,420,103 4,349,812
7.85% PV -1 3,351,930 4,138,704 4,234,524 4,452,631 4,391,981
7.60% PV -2 3,354,524 4,149,926 4,255,870 4,485,475 4,434,658

Check 1 1 1 1 TRUE
Enterprise Value
WACC TGR 1.80% 2.05% 2.30% 2.55% 2.80%
8.60% 103,912,811 106,436,238 109,167,165 112,131,242 115,358,543
8.35% 107,215,902 109,966,421 112,951,802 116,202,340 119,753,795
8.10% 110,773,791 113,780,676 117,054,671 120,631,797 124,554,879
7.85% 114,617,972 117,915,646 121,518,686 125,470,234 129,821,981
7.60% 118,785,373 122,414,574 126,394,859 130,778,300 135,627,830

Discount Period 0.33 1.17 2.17 3.17 4.17

Equity Value
WACC TGR 1.80% 2.05% 2.30% 2.55% 2.80%
8.60% 105,025,811 107,549,238 110,280,165 113,244,242 116,471,543
8.35% 108,328,902 111,079,421 114,064,802 117,315,340 120,866,795
8.10% 111,886,791 114,893,676 118,167,671 121,744,797 125,667,879
7.85% 115,730,972 119,028,646 122,631,686 126,583,234 130,934,981
7.60% 119,898,373 123,527,574 127,507,859 131,891,300 136,740,830

Debt -10,469,000
Cash 11,582,000
Terminal Value
TGR
1.80% 2.05% 2.30% 2.55% 2.80%

90,125,219 93,797,086 97,760,564 102,051,828 106,713,295

93,567,304 97,521,657 101,803,042 106,453,778 111,523,813
97,282,751 101,554,257 106,194,261 111,252,598 116,788,512
101,305,471 105,934,744 110,981,382 116,504,493 122,574,898
105,675,227 110,710,167 116,220,474 122,276,808 128,964,557

TRUE
Present TV
1.80% 2.05% 2.30% 2.55% 2.80%
83,668,874 86,192,301 88,923,229 91,887,306 95,114,607
86,864,377 89,614,895 92,600,276 95,850,815 99,402,269
90,313,658 93,320,544 96,594,539 100,171,665 104,094,747
94,048,201 97,345,875 100,948,915 104,900,463 109,252,210
98,104,919 101,734,120 105,714,405 110,097,846 114,947,376
x TTM 5/31/2024 5/31/2023 5/31/2022

Change in working capital 197,000 716,000 -513,000 -1,660,000

Change in Receivables -623,000 -329,000 489,000 -504,000

Change in Inventory -132,000 908,000 -133,000 -1,676,000

Change in Prepaid Assets 274,000 -260,000 -644,000 -845,000

Change in Payables And Accrued Expense 678,000 397,000 -225,000 1,365,000

Receivables 4,427,000 4,131,000 4,667,000

DSO 31 29 36

Inventory 7,519,000 8,454,000 8,420,000

DIO 96 107 122

Prepaid Assets -- -- 2,129,000

% Sales 5%

Payables And Accrued Expenses 5,959,000 5,542,000 6,595,000

DPO 76 70 95
5/31/2021 2025A 2026E 2027E 2028E 2029E

45,000 1,943,544 -360,234 432,889 430,949 288,323

-1,606,000 130,562 -201,274 249,104 247,987 165,914

507,000 230,541 -396,316 420,476 418,591 280,056

-182,000 1,939,855 -85,669 106,027 105,552 70,619

1,326,000 -357,414 323,025 -342,717 -341,181 -228,265

Mean Median
4,463,000 4,557,562 4,356,288 4,605,391 4,853,378 5,019,292
37 33.4860 33.9644

6,854,000 7,749,541 7,353,225 7,773,701 8,192,292 8,472,348

102 106.6654 104.2373

1,498,000 1,939,855 1,854,185 1,960,212 2,065,764 2,136,383

3% 5% 4%

6,298,000 6,316,414 5,993,389 6,336,106 6,677,287 6,905,551

94 83.8151 84.9606
 2030E

523,284

301,120

508,278

128,167

-414,282

5,320,412

8,980,626

2,264,550

7,319,833
 WACC
WACC = % of equity x cost of equity + % of debt x cost of debt x (1 - Tax Rate)
Cost of equity = Risk free rate + Beta x Market Risk Premium

x WACC
Market Cap 118,576,592
% of Equity 91.9%
Cost of Equity 8.43%
Risk Free Rate 4.23%
Beta 1.02
Market Risk Premium 4.12%

Debt 10,469,000
% of Debt 8.1%
Cost of Debt 5.25%
Tax Rate 17.54%

Total 129,045,592

x WACC 8.10%
X Items TTM 5/31/2024 5/31/20235/31/2022 5/31/2021

D&A 843,000 844,000 859,000 840,000 797,000

Change in working capital 197,000 716,000 -513,000 -1,660,000 45,000

Capex -603,000 -812,000 -969,000 -758,000 -695,000