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On Wednesday, Bernstein analysts maintained a positive stance on Adidas AG (ETR:ADSGN) (ADS:GR) (OTC: ADDYY), reiterating an Outperform rating and a price target of EUR300.00. The firm's confidence in the sportswear giant comes after Adidas (OTC:ADDYY) pre-announced its fourth-quarter results, marking the fifth consecutive quarter of such announcements. Adidas reported a 12% year-on-year constant currency (cc) growth and a significant operating profit increase of over €1 billion. With a market capitalization of $48.3 billion and impressive YTD returns of 8.58%, InvestingPro data shows Adidas trading near its 52-week high of $134.39.
The holiday quarter was particularly robust for Adidas, showcasing strong growth across all regions, with North America (N.Am) performing notably well. The company experienced a +19% cc increase, surpassing both the consensus estimate of 13% and Bernstein's own projection of 14%. This growth was fueled by success in both the Lifestyle and Performance product divisions. As a prominent player in the Textiles, Apparel & Luxury Goods industry according to InvestingPro, Adidas maintains strong market positioning with annual revenue reaching $25.1 billion.
By region, North America's growth was impressive, with an estimated +8% cc increase compared to low single-digit percentages in the previous two quarters. Both China and Europe also reported strong performances in the fourth quarter. Additionally, the Yeezy brand made a substantial contribution to sales, estimated at €70 million, and a smaller yet significant contribution to operating profit, estimated at €10 million.
The analysts highlighted the strong momentum Adidas has gained among consumers and retailers during the holiday quarter, which bodes well for the company's future. With Adidas set to announce its 2025 guidance on March 5, the comments from Bernstein suggest optimism for continued double-digit growth and market share gains across various regions. InvestingPro analysis reveals multiple positive indicators, including expected net income growth this year. Subscribers can access 12 additional ProTips and comprehensive financial analysis through the Pro Research Report, providing deeper insights into Adidas's market position and growth potential.
In other recent news, Adidas has seen significant developments. The company reported a 19% rise in Q4 2024 revenues, and a substantial improvement in full-year profits with operating profit reaching €1,337 million. Deutsche Bank (ETR:DBKGn) has adjusted Adidas's stock price target upwards to EUR300, following an EPS upgrade of 8%, reaffirming their Buy recommendation. Bernstein analysts have also upgraded Adidas stock from 'Market Perform' to 'Outperform', setting a new price target of EUR300.
Furthermore, Adidas headquarters were searched again as part of an ongoing European Union tax investigation, examining alleged tax irregularities amounting to €1.1 billion. Despite this, Adidas does not anticipate a significant financial impact from the matter. A Bernstein analysis revealed a significant 11.9% drop in November retail sales of Pou Sheng International Holdings Ltd., a major wholesale partner for Adidas in China, despite which, Adidas showed resilience with a 19.88% year-to-date price return. These are some of the recent developments in the company.
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