Adidas AG (ETR:ADSGN) Stock Outlook

Analyst Expectations

Investing.com reports that RBC Capital Markets finds the setup for Adidas AG stock attractive ahead of its Q3 2024 earnings report, scheduled for October 29.

Analysts expect Adidas to maintain strong revenue growth and gross margin momentum, suggesting a potential pre-release of guidance for FY24. They believe consensus underestimates Q4 2024 EBIT due to one-off factors and effective cost management.

EBIT Estimates

RBC has increased its EBIT estimates for Adidas by 12% for FY24 and 9% for FY25. The stock price target has also been upgraded from €250 to €260.

Q3 2024 Projections

For Q3, RBC anticipates revenues of €6.40 billion, indicating a 10% growth at constant exchange rates, or 14% adjusted for the Yeezy brand’s impact. They expect a gross margin of 50.7% and an EBIT of €542 million, reflecting an 8.5% margin.

Regional Growth

Robust revenue growth is projected in regions like Latin America, Emerging Markets, Greater China, and Europe, all expected to achieve double-digit growth. North America, however, is forecasted to remain flat.

Key Factors to Watch

RBC highlights the importance of product supply availability, upcoming product launches for Spring/Summer 2025, macroeconomic conditions in China, and IAS 29 accounting standards guidance in the upcoming financial report.

Valuation

Adidas is trading at attractive multiples compared to the Western Sporting Goods sector, with a projected price-to-earnings (P/E) ratio of 23x for 2026, enterprise value to EBIT at 15x, and enterprise value to sales at 1.5x.