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Investing.com - Piper Sandler has reduced its price target on Adidas AG (OTC:ADDYY) to EUR190.00 from EUR200.00 while maintaining an Overweight rating on the stock. The downgrade comes as Adidas shares have fallen 12.99% in the past week, with the stock currently trading at $96.17, near its 52-week low of $94.33. According to InvestingPro data, the company appears undervalued based on its Fair Value assessment.
The firm noted that Adidas continues to show strong performance in its footwear segment, with Football up double digits and Running increasing in the 30% range during the third quarter of 2025, driven by Adizero and Everyday Running franchises like Supernova. This segment’s strength has contributed to Adidas’s overall revenue growth of 10.95% over the last twelve months, with the company maintaining a healthy gross profit margin of 51.22%.
In North America, both Footwear and Apparel maintained double-digit growth, though slightly moderated, with Accessories expected to rebound in the fourth quarter of 2025 after a third-quarter reset. China remains a bright spot, with Adidas achieving double-digit growth and expanding profitability in the region. This regional performance is critical as Adidas works to improve its return on invested capital, which currently stands at 12%.
Piper Sandler indicated that while the market appears skeptical about Adidas maintaining low double-digit sales momentum, as reflected in the stock trading below 10x EV/EBITDA, the focus for 2026 will likely shift toward profitability rather than sales growth. InvestingPro data shows that Adidas currently trades at an EV/EBITDA of 16.7, with analyst price targets ranging from $105 to $150, suggesting potential upside from current levels.
The price target reduction to EUR190 represents a multiple of 18x 2026 estimated PE, down from 19x previously, which Piper Sandler attributed to limited sales upside versus consensus expectations, while noting that Adidas continues to target a 10% EBIT margin by 2026. With a current P/E ratio of 24.66 and a year-to-date price decline of 20.52%, investors seeking deeper insights into Adidas’s valuation and growth prospects can access the comprehensive Pro Research Report available on InvestingPro, which offers expert analysis on what really matters for this global sportswear leader.
In other recent news, Adidas AG reported its third-quarter results, revealing sales of €6,630 million, marking a 12% increase at constant foreign exchange rates, excluding Yeezy. This performance was slightly below company-compiled consensus estimates but showed strong growth across various markets and product divisions. The company anticipates a direct impact of $140 million on its operating profit by 2025 due to U.S. import tariffs, with the most significant effects expected in the fourth quarter. Analyst firms have varied perspectives on Adidas’s prospects, with Bernstein lowering its price target to EUR235 while maintaining an Outperform rating, citing cautious guidance. Meanwhile, Piper Sandler has reiterated an Overweight rating ahead of the third-quarter earnings report, expecting continued double-digit sales growth in North America. TD Cowen has raised its price target to EUR201, acknowledging strong execution, though it considers fiscal year 2026 estimates ambitious. JPMorgan has adjusted its price target to EUR234, maintaining an Overweight rating despite foreign exchange headwinds. These developments reflect a mixed outlook for Adidas, with analysts weighing strong execution against external challenges.
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