On Thursday, TD Cowen maintained a Hold rating on Adidas AG (ETR:ADSGN) (ADS:GR) (OTC: ADDYY) shares, keeping the price target at EUR262.00. According to InvestingPro data, Adidas (OTC:ADDYY) commands a market capitalization of $45.7 billion, with analysts generally maintaining a neutral stance on the stock. The company’s shares have shown strong momentum, delivering a 27.6% return over the past year. The firm’s analyst highlighted Adidas’s robust start to the fiscal year 2025, emphasizing the brand’s momentum in sales and margins. Adidas’s management has been recognized for consistently setting conservative goals and surpassing them, as evidenced by the fiscal year 2024’s reported top-line growth of 12% against the initial mid-single-digit percentage growth forecast.
The analyst noted that Adidas’s earnings before interest and taxes (EBIT) margin is projected to be close to 7% in the fiscal year 2025, with management expressing confidence in achieving a 10% margin by the fiscal year 2026. This outlook aligns with InvestingPro data showing the company maintains a healthy gross profit margin of 49.7% and operates with a moderate level of debt. InvestingPro’s analysis suggests the stock is currently trading near its Fair Value. According to the analyst, Adidas has not only met but exceeded the objectives set out in its "Roadmap to Success" for 2024. This success is attributed to strategic marketing and innovation across both lifestyle and performance sectors.
The company’s operational improvements have been significant, contributing to the positive outlook. Adidas’s brand strength is expected to continue into the fiscal year 2025, supported by solid trends and clear visibility into order book trends. Moreover, the company has had a strong start to the first quarter, despite facing more challenging comparisons from the previous year.
The analyst’s commentary reflects confidence in Adidas’s ability to maintain its current trajectory of growth and margin improvement. The brand’s operational strategies and the management’s ability to exceed its financial guidance have been key factors in this positive assessment.
Investors and stakeholders in Adidas AG can look forward to the company’s continued performance as it navigates through the fiscal year 2025 with a well-established plan for growth and profitability. The Hold rating indicates a wait-and-see approach, suggesting that while the company is performing well, there may not be significant upside potential factored into the current stock price. InvestingPro subscribers have access to 12 additional key insights about Adidas, including detailed valuation metrics and growth projections, along with a comprehensive Pro Research Report that provides deep-dive analysis of the company’s financial health and market position.
In other recent news, Adidas has 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 significantly by 520 basis points to 49.8%, and operating profit reached €57 million, a notable improvement from the previous year’s loss of €377 million. In addition to these financial updates, Adidas is planning to reduce its workforce at its German headquarters by up to 500 positions, part of an effort to simplify its organizational structure.
Regarding analyst perspectives, Deutsche Bank (ETR:DBKGn) adjusted its price target for Adidas to €280, maintaining a Buy rating, while RBC Capital Markets set a target of €285 with an Outperform rating, citing a strong wholesale order book and product pipeline. Bernstein reiterated an Outperform rating with a €300 target, expressing confidence in Adidas’s growth prospects and operational momentum. CFRA raised its price target from €150 to €195 but maintained a Sell rating, citing concerns over Adidas’s valuation compared to peers. These developments highlight the varied analyst opinions on Adidas’s future performance amidst its recent financial achievements and strategic adjustments.
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