Adidas’s New Price Target Leaves Nike in Its Wake

HERZOGENAURACH, Germany — Adidas AG's stellar year keeps getting better, reflected in ever increasing price targets for a stock that's out-sprinting main rival Nike Inc.

The German sportswear giant is the second-best performing stock on Europe’s Stoxx 600 Personal & Household Index this year, gaining 52 percent, and was just rewarded with a new Street-high price target, the second in a just over a week. In contrast, shares in Nike, reeling from a scandal that forced it to pull its flag sneakers from stores, are up only 16 percent in the period.

What’s so great about Adidas? Its capacity to stay tuned to clients’ desires and the latest fads, according to Citigroup Inc. analyst Adam Cochrane.

Adidas “is resonating with consumers” across the most important areas, including “online, authenticity, personalisation, shorter lead times, influencers and sustainability,” the analyst wrote in a note, raising the stock’s price target to €325 from €230. That’s above the highest target among 38 analysts tracked by Bloomberg, at €315.

UBS also raised its price target today, to €268 from €210, citing expectations for sustained gross margin strength and higher earnings-per-share estimates.

Adidas shares advanced as much as 0.8 percent before slipping in negative territory, to trade down 0.5 percent at 11:44 a.m. in Frankfurt.

To be sure, not everyone is that impressed. HSBC analyst Erwan Rambourg earlier this week downgraded the stock to hold from buy, citing a lack of near-term catalysts.

“The capacity to surprise an enthusiastic investor base is lower now,” Rambourg said in a July 2 note to clients.

By Albertina Torsoli, Joe Easton and James Cone; editors: Beth Mellor, Monica Houston-Waesch, and Paul Jarvis.