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Adidas: High hopes among analysts ahead of Q3 update

Monday, October 24, 2016 4:09
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Deutsche Bank has upgraded its target for Adidas AG (ETR:ADS) to €170 per share, from €165, with analyst Adrian Rott saying the sportswear and apparel group is in a comfortable position.

“After a number of beats & raises, some more controversial than others, it was about time for the cadence of news to slow down,” Rott said in a note.

“We think the lack of headlines as of late shouldn’t worry and expect a good set of Q3 results.”

Rott highlighted that industry data and UBS’s ‘channel checks’ suggests the group’s three key markets – Europe, China and North America – are all performing well.

Deutsche estimates €5.29bn of sales for the third quarter, versus  €4.75bn in the 2015 comparative and a consensus forecast of €5.36bn, and it expects net profit of  €386mln for the quarter (against  €311mln Q3 2015 and a consensus estimate of  €391mln).

The German bank rates Adidas as a ‘buy’. Elsewhere, Macquarie tips the stock to ‘outperform’ and analyst Andreas Inderst says there’s consensus is too conservative and could be upgraded after Adidas updates on its third quarter performance.

“We expect a good Q3 performance based on healthy global market share gains by brand adidas,” the Macquarie analyst said in a note.

He added: “We think FY16 upgrades are already priced in the shares.

“What are not yet fully priced in are the strong prospects for the years ahead. Hence, key focus should be on initial comment by new management for FY17 and the disposal plan for the non-core business.”

Adidas is expected to provide a third quarter update later this week.

Story by ProactiveInvestors


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