Adidas Stock Poised for Near-Term Outperformance, Analysts Say
Adidas (ETR:) (OTC:) stock is showing signs of potential near-term outperformance, according to analysts at Baird. Despite maintaining a “neutral" rating on the stock, the analysts are optimistic about several catalysts that could drive upside by the end of the year.
Key factors contributing to this positive outlook include strong brand momentum, solid performance in key regions, and the possibility of upward revisions to earnings expectations for 2025. Baird highlighted the strength of Adidas in its terrace footwear segment, distribution expansion, and outperformance in the Chinese market as underappreciated drivers of growth.
The company is set to have a sell-side focused call early next week, with a potential pre-release of earnings in October, which could further boost confidence and act as a catalyst for stock movement. Baird's analysts project a solid third quarter for Adidas, with an earnings per share estimate of €2 and revenue growth of 16% year-over-year.
Search trends for Adidas’s classic models like Samba, Gazelle, and Spezial remain strong, indicating growing appeal in both performance footwear and lifestyle segments. The company's recent execution improvements in China, where sales grew by 9% last quarter, are expected to continue contributing to its outperformance in the region.
Baird's analysts are also raising their EPS estimates for 2025, foreseeing potential for over 10% upside for the stock by year-end. However, they caution about longer-term prospects, particularly in light of potential challenges in Adidas's product pipeline and competition from Nike.
In conclusion, investors should keep an eye on Adidas stock as it shows promise for near-term growth driven by strong brand momentum, regional performance, and upcoming earnings releases. However, long-term prospects remain uncertain due to potential challenges in product innovation and competition. It's essential to stay informed and monitor developments to make informed investment decisions.
