adidas: Credit Suisse a seller but raises TP

(CercleFinance.com) - Credit Suisse has confirmed its Underperform rating on the stock, although has raised its target price for it to E112 (from E106), based on 25x 2025e EPS.


"We have little doubt that there is a substantial recovery in brand heat, sales momentum and margin coming, in that order. The issue we have is the speed of that recovery in a fragmenting and more competitive industry, and what is already discounted in the current share price," the broker says.

Credit Suisse makes fairly minimal changes to forecasts, with own EBIT margins of 0.5%, 3.9% and 5.4% for the next 3 years (vs. 0.2%, 3.5%, 5.1%), while its EPS forecasts are respectively 36% and 38% below consensus for 2024 and 2025.

"Returning to 7.5% in 2 years looks very demanding, given the inherent lags in the sporting goods industry, and it would be notably faster than Gulden managed at Puma," Credit Suisse says.


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