Adidas: share price falls, Barclays upgrades to 'underweight

(CercleFinance.com) - On Monday, adidas shares posted the biggest drop in the DAX index on the Frankfurt Stock Exchange, penalized by a sector note from Barclays, which lowered its recommendation on the stock.


At around 12:15pm, the German sports equipment manufacturer's shares were down 4.5%, while the DAX rebounded by over 0.9% at the same time.

On their return from a trip to China, Barclays analysts report that they have lowered their recommendation on adidas from 'overweight' to 'in-line weighting', with a target reduced from E254 to E215.

In addition to the gloomy outlook for the Chinese economy, the research firm cites uncertainties surrounding activity in the United States and a valuation deemed sufficiently rich.

While it's true that adidas has one of the most dynamic brands in the sector, we're more cautious about the structural opportunities arising in China following our move there," it explains.

This factor, added to concerns about the US market, is likely to penalize the trajectory of margins in 2025 and beyond, it continues, pointing out that the stock has already climbed 20% this year, compared with a 6% gain for the European STOXX 600.

While the stock is now trading on valuation multiples above its ten-year average, the Group will now have to do better than expected and raise its targets, a prospect that Barclays considers unlikely in the current environment.

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