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On Monday, Baird analysts upgraded Adidas AG (ETR:ADSGN) (ADS:GR) (OTC: ADDYY) stock rating from Neutral to Outperform, with a new price target set at EUR240.00. The upgrade follows a notable decline in the company’s stock value, which has seen a 25% drop from its highs. The decision to lift the rating is backed by a series of factors that suggest potential growth for the sportswear giant.
Analysts at Baird highlighted several key drivers behind their optimistic outlook. Following a late-March visit to the company, they expressed confidence in the global brand momentum that Adidas (OTC:ADDYY) is experiencing. This momentum is not limited to a single sector but is broadening across both lifestyle and performance categories. Additionally, the company boasts a deep product pipeline and improving wholesale relationships. InvestingPro analysis shows strong fundamentals supporting this outlook, with a healthy gross profit margin of 50.8% and revenue growth of 10.5% over the last twelve months.
Another positive sign for Adidas is its minimal exposure to U.S. tariffs, which mitigates some of the risk factors associated with international trade tensions. Baird also pointed to Adidas’s conservative guidance for 2025, which the firm believes provides a safe forecast that could be exceeded.
On April 3, Baird trimmed its earnings per share (EPS) estimates for Adidas, yet they maintain a positive long-term EPS outlook. They suggest that an EPS of €11 or more is achievable by 2026, which could propel the stock’s value toward the high-€200 range. This projection is based on a mid-20 times price-to-earnings (P/E) ratio, compared to the current P/E ratio of 17 to 18 times.
The upgrade by Baird is a signal to investors that despite recent stock price challenges, Adidas’s underlying business and brand strength may offer a promising future. The new price target of EUR240.00 represents a significant increase from the current levels, indicating the potential for stock appreciation. InvestingPro offers additional insights through its comprehensive Fair Value analysis and 6 more exclusive ProTips for Adidas. Subscribers can access the full Pro Research Report, which provides detailed analysis of Adidas’s financial health, scoring FAIR on InvestingPro’s overall financial health assessment.
In other recent news, Adidas AG’s financial performance and market positioning have been a focal point for analysts. Bernstein analysts have maintained an Outperform rating for Adidas with a price target of EUR 300.00, underscoring the company’s robust consumer demand and promising product pipeline. In contrast, Berenberg initiated coverage with a Hold rating and a price target of EUR 230.00, citing concerns over the company’s medium-term financial targets and potential impacts from unpredictable U.S. trade policies. Meanwhile, HSBC upgraded Adidas from Hold to Buy, although it reduced the price target to EUR 240.00, expecting the company to gain market share amid challenging economic conditions. RBC Capital Markets also rated Adidas as an Outperform idea, highlighting the brand’s strong momentum and visibility in its wholesale order book. Additionally, TD Cowen maintained a Hold rating with a EUR 262.00 target, acknowledging Adidas’s solid start to fiscal year 2025 and its strategic operational improvements. These developments reflect a mix of optimism and caution among analysts regarding Adidas’s future performance and market dynamics.
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