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Investing.com -- Adidas (ETR:ADSGN) shares rose more than 4% Wednesday after Jefferies upgraded the stock to "buy" from "hold," citing a sharp valuation pullback and expectations of stronger growth drivers across the business.
The analysts set a price target of €220, up from the previous €166 closing price, implying a 33% upside.
The stock has traded between €263.80 and €160.75 over the past year, with a current market capitalization of €30.4 billion.
The upgrade follows a period of weakness for Adidas shares, which had been pressured by concerns that the brand’s “Terrace” line was nearing maturity.
Jefferies said those worries appear overstated and pointed instead to momentum in running, apparel, and football.
The brokerage flagged Adidas’ gearing toward the 2026 World Cup as a major growth driver, alongside visible progress in cascading demand from footwear into apparel.
Jefferies also noted that Adidas is positioned to benefit from the impact of tariffs and a weaker dollar compared with peers.
While the company has estimated a €200 million increase in costs tied to tariffs in the second half of 2025, the report said Adidas’ smaller U.S. revenue base and 100% dollar sourcing structure should help cushion margins.
The analysts added that reduced tariffs on imports from markets like Pakistan, Thailand and Cambodia could ease pressure and make an upgrade to full-year EBIT guidance possible with results due October 29.
Earnings estimates for 2025 were revised up, with Jefferies now projecting earnings per share of €7.63, compared with a previous estimate of €7.37.
The analysts’ updated three-year outlook points to EPS of €7.63 in 2025, €10.47 in 2026, and €12.27 in 2027.
Adidas’ rating upgrade and stock rebound come as the brand continues to push further into performance categories.
Analysts pointed to sellout demand for Adizero flagship running shoes, growing traction in apparel, and strengthening sponsorship positions in football, including the 2026 World Cup and national team partnerships.