On Thursday, Deutsche Bank (ETR:DBKGn) analysts adjusted the price target for Adidas AG (ETR:ADSGN) (ADS:GR) (OTC: ADDYY) shares, reducing it to €280.00 from the previous €300.00, while still maintaining a Buy rating on the stock. The revision comes despite the firm’s recognition of Adidas (OTC:ADDYY)’s operational efficiency and its strong earnings momentum since April 2024. According to InvestingPro data, Adidas maintains its position as a prominent player in the Textiles, Apparel & Luxury Goods industry, with a substantial market capitalization of $45.9 billion.
The analysts noted that Adidas’s share price has remained relatively unchanged since last April, despite the company’s consistent positive earnings performance. However, they acknowledged that Adidas’s stock has fared better in relative terms compared to its peers, with InvestingPro data showing a strong 27.6% total return over the past year. Looking ahead, the analysts expect Adidas to be a leader in sales and EPS growth into 2025, supported by the company’s healthy gross profit margin of 49.7% and expected revenue growth of 11% for fiscal year 2024.
Deutsche Bank also revised its 2025e EBIT forecast for Adidas downward by 9% to €2,121 million, which suggests an 8.0% margin for the year. This updated forecast still positions Adidas approximately 20% ahead of the mid-point of the company’s own guidance.
The analysts’ commentary highlighted Adidas’s strategic moves, stating, "Adidas is making all the right moves from an operational standpoint but the share price is broadly flat since April 2024 despite consistently positive earnings momentum. Although in relative terms the performance is better. In terms of sales and EPS growth into 2025, Adidas is set to be at the top of the class."
Investors and market watchers will likely continue to monitor Adidas’s performance, especially as the company approaches its 2025 financial targets. The revised price target reflects the analysts’ updated expectations while affirming their confidence in the company’s market position and growth prospects.
In other recent news, Adidas AG reported preliminary fourth-quarter revenues of €5.97 billion, marking a 24% year-over-year increase and surpassing market expectations. The company’s gross margin expanded by 520 basis points to 49.8%, and it achieved an operating profit of €57 million, a significant improvement from the €377 million loss in the same period last year. Bernstein analysts reiterated an Outperform rating with a price target of €300, citing strong growth across regions, particularly in North America, and notable contributions from the Yeezy brand. Meanwhile, RBC Capital Markets adjusted its price target for Adidas to €285 while maintaining an Outperform rating, noting robust forward wholesale orders and a strong start to the year. CFRA also raised its price target from €150 to €195, despite maintaining a Sell rating, due to Adidas’s operating metrics lagging behind competitors. Additionally, Adidas plans to cut up to 500 jobs at its German headquarters as part of efforts to simplify its structure. These developments reflect a mixed outlook from analysts, with some expressing optimism about Adidas’s growth potential and others advising caution due to high valuations.
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