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Essay on Reebok International Ltd
(RBK) is the world’s third largest manufacturer, designer and marketer of athletic footwear, apparel and accessories. Sales for 2002 were 3.128 billion dollars, which was a 4.5% gain over the previous year. Their sales breakdown was: Reebok footwear (domestic), 30%; Reebok apparel (domestic), 11%; Reebok international (footwear and apparel combined), 39%; Rockport, 13%.
Stock Price Information
Recent Price (10/30/03): $39.06
Target Price $45.94
52-Week Range: $26.95 - $39.20
Market Capitalization: $2,191 million
Share Data
Shares outstanding 67,752 million
Convertible Issue 250 million
Beta 1.00
Yield 0.81%
Key Rations
Return on Equity 16.3%
Return on Assets 8.04%
Price to Earnings 16.40x
Price to Book 2.41x
Earnings
2002a $1.87
2003e $2.34
2004e $2.75
Investment Thesis and Recommendation:
- Reebok International Ltd (RBK) is the world’s third largest manufacturer, designer, and marketer of athletic shoes, apparel, and accessories.
- Reebok sells its products under the following brands: Reebok, Rockport, Ralph Lauren and Greg Norman.
I am initiating a watch coverage of Reebok International Ltd. with a Watch recommendation and a 12-month price target of $45.94 and an entry price of $38.54
Growth Drivers:
- Increase in back log of open orders.
- Reebok’s new RBK collection is a hit with major demographic.
- Classic Footwear has had a huge increase in sales for the third quarter and this year.
- Their “Above the Rim” basketball shoes have had good sell through at the retail side.
- NBA & NFL Licensing business. NBA will provide 11 new NBA teams for the 2004-2005 season. They presently have 19 teams for this season.
- Dispute between Nike and Footlocker has led to increased exposure for Reebok.
- Weak dollar has led to growth opportunities in Europe.
Reebok’s product line is as follows:
RBK: This brand is the street inspired footwear, apparel, and accessories designed to appeal....
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Total words: 3,403
Total reference: 11
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