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On Tuesday, Citi analysts upheld their Buy rating and €290.00 price target for Adidas AG (ETR:ADSGN) (ADS:GR) (OTC:ADDYY), despite the company confirming a customer data breach. Adidas revealed that an unauthorized external party had accessed some of its customer data through a third-party provider. The compromised information primarily includes customer contact details from those who have reached out to the company’s service desk, with no payment-related data such as passwords or credit card details being affected.
Adidas management has taken immediate action to mitigate the breach, including informing potentially impacted customers and the necessary authorities, as well as initiating a thorough investigation into the incident. Citi analysts pointed out that the main concerns stemming from the breach are potential reputational harm and regulatory scrutiny. However, they consider operational risks to be minimal since the breach occurred through a third-party system and not Adidas’s own IT infrastructure.
The analysts expect the share price reaction to be neutral to slightly negative, taking into account the nature of the breach involving a third-party system, and considering the current heightened investor sensitivity to cybersecurity issues. This follows a string of similar cybersecurity events that have recently affected other consumer companies.
Adidas is actively addressing the incident and has assured that it is taking the necessary steps to prevent future occurrences. The company’s swift response and transparency in handling the situation reflect its commitment to customer privacy and data security.
The Citi analysts’ reiteration of a Buy rating suggests confidence in Adidas’s ability to navigate through this challenge without significant long-term impact on the company’s stock performance. The €290.00 price target remains unchanged, signaling a belief in the inherent value and potential growth of Adidas shares.
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