On Thursday, Baird financial firm updated its outlook on Adidas AG (ETR:ADSGN) (ADS:GR) (OTC: ADDYY), increasing the price target to €225 from the previous €200. The firm maintains a Neutral stance on the stock. This adjustment follows the company's fourth-quarter update, which aligned with prior estimates and highlighted the challenges in the current market. Despite these difficulties, Baird noted positive signs, particularly in markets outside of North America.
The firm's analysts acknowledged Adidas (OTC:ADDYY)'s improving brand fundamentals and anticipate that the second half of the year will see a 10% increase in revenue growth. This expected improvement is believed to bolster investor confidence in the company's projections for 2025 and 2026.
The analysts explained that while the potential for earnings recovery could warrant a premium valuation for Adidas shares, they recommend a cautious approach to investment, suggesting a more attractive entry point would be approximately 10% below the stock's closing levels.
Adidas's recent guidance for 2024 was described as conservative by Baird, yet the firm remains optimistic about the company's future performance. The analysts are particularly encouraged by the expected re-acceleration in revenue growth, which they see as a key driver for the sportswear giant's longer-term financial health.
The updated price target reflects Baird's outlook on the stock's value, taking into account the anticipated earnings per share (EPS) for 2025. This projection is set against the backdrop of a challenging environment, yet it highlights the potential for Adidas to regain its momentum in the coming years.
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