Citi lifts Amer Sports price target to $42, maintains buy rating

On Wednesday, Citi analysts adjusted their outlook on Amer Sports Inc. (NYSE:AS), increasing the price target to $42.00, up from the previous target of $30.00, while reiterating a Buy rating on the stock. The stock, currently trading at $37.37, has shown remarkable momentum with a 19.43% gain in the past week alone. According to InvestingPro data, the company has demonstrated strong financial performance, though current valuations suggest the stock may be trading above its Fair Value.

Amer Sports’ first quarter was marked by impressive performance, with Arc’teryx and Salomon brands posting growth of 28% and 25% respectively. This surge contributed to a gross margin expansion of 330 basis points. The company’s overall revenue growth of 21.38% and robust gross margin of 56.28% reflect the success of its direct-to-consumer (DTC) strategy and increasing brand popularity. InvestingPro subscribers can access 20 additional key insights about Amer Sports’ growth trajectory and financial health.

Management’s confidence in mitigating tariff impacts through strategic measures such as vendor negotiations, production adjustments, and selective price increases was highlighted. This proactive approach is expected to support the company’s financial outlook and operational stability.

Citi’s analysis projects a continuation of strong double-digit earnings per share (EPS) growth over the coming years, with estimates of an 80% increase in fiscal year 2025 and 38% in fiscal year 2026. The firm’s ability to expand margins and potentially reduce debt and taxes further supports the optimistic financial perspective.

The raised price target reflects Citi’s view of Amer Sports as a compelling growth narrative within the retail sector. The analyst believes that the current stock levels present an attractive risk/reward scenario for investors, underpinned by the company’s robust growth dynamics and strategic initiatives.

In other recent news, Amer Sports reported better-than-expected first-quarter results. The company posted adjusted earnings per share of $0.27, exceeding the analyst consensus estimate of $0.19 by $0.08. Additionally, Amer Sports achieved a revenue of $1.47 billion for the quarter. The company did not provide specific forward guidance in its earnings release. Analysts are expected to seek further details on the company’s outlook during the upcoming conference call. Amer Sports owns several well-known sporting goods and apparel brands, and its strong first-quarter results indicate successful execution across its brand portfolio. These developments have led to increased investor optimism about Amer Sports’ performance moving forward.

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