Our DCF-based target price of $55 assumes a 12% discount rate and a 5x terminal multiple on year five EBITDA. Our target price implies an F25E P/E multiple of 9.5x and an F25E EV/EBITDA multiple of 4.5x.

Downside risk to our target price includes: (1) Lower income consumer weakness persists into F25 and beyond; (2) Nike's turnaround strategy does not prove successful; (3) New store opening plans fall short of expectations/mgmt's goals; (4) The promotional envirnoment intensifies; (5) Broader macro-economic slowdown in the US.