On Thursday, Bernstein analysts maintained a positive outlook on Adidas AG (ETR:ADSGN) (ADS:GR) (OTC: ADDYY), reiterating an Outperform rating and a price target of EUR300.00. The stock, currently trading at $120.13 with a market capitalization of $42.72 billion, has recently entered oversold territory according to InvestingPro technical indicators. Following a series of meetings with the company’s Investor Relations after the full-year 2024 results, the analysts highlighted several key points that support their optimistic stance on the sportswear manufacturer.
The discussions centered on current quarter-to-date (QTD) trends, consumer sentiment, the 2025 product pipeline with a focus on Classics, and factors contributing to continued margin growth. With a robust gross profit margin of 50.77% and revenue growth of 10.53% in the last twelve months, Adidas (OTC:ADDYY) has not experienced softness in the U.S. market during the QTD. The company’s low market share in the U.S., described as low single digits percentage, and the popularity of its products, which are selling at full prices, indicate direct-to-consumer demand and wholesale sell-through remain robust.
With two weeks remaining in the first quarter, the sustained consumer interest is seen as a bullish indicator for Adidas’ performance. The analysts had upgraded the stock rating in January, anticipating another year of financial outperformance, including potential beats and raises. They foresee the company outperforming its conservative 2025 guidance throughout the year, driven by strong performance from the Terrace collection and a promising new product pipeline that could lead to market share gains across all regions. InvestingPro analysis shows the stock trading at premium multiples, suggesting high growth expectations. For deeper insights into Adidas’s valuation and growth prospects, including 10+ additional ProTips and comprehensive financial metrics, check out the full Pro Research Report available on InvestingPro.
In other recent news, Adidas AG reported preliminary fourth-quarter revenues of €5.97 billion, marking a 24% year-over-year increase and exceeding market expectations. The company’s gross margin expanded by 520 basis points to 49.8%, and operating profit turned positive at €57 million, a significant improvement from the previous year’s loss. Analysts from Deutsche Bank (ETR:DBKGn) and RBC Capital Markets have adjusted their price targets for Adidas, with Deutsche Bank lowering it to €280 while maintaining a Buy rating, and RBC Capital reducing it to €285 but keeping an Outperform rating. TD Cowen maintained a Hold rating with a price target of €262, acknowledging Adidas’s strong start to fiscal year 2025 and its successful exceeding of financial goals. Bernstein analysts reiterated an Outperform rating with a €300 price target, expressing confidence in the company’s growth trajectory and market momentum. CFRA, however, raised its price target to €195 from €150 but kept a Sell rating, citing concerns over Adidas’s valuation compared to its peers. The analyst feedback highlights a mix of optimism regarding Adidas’s operational improvements and caution due to its high valuation. These developments reflect a dynamic period for Adidas as it navigates through its financial targets for 2025.
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