JPMorgan (NYSE:JPM) has assigned a “Positive Catalyst Watch” status to Adidas AG (DE:ADS) stock, anticipating positive developments in the near future. Analyst Chiara Battistini from JPMorgan confirmed a Buy rating on the stock and raised her price target from €195 to €230. The new target predicts an upside of around 19% from the current level.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Adidas is among the leading sportswear manufacturing companies in the world, widely known for its footwear and other sports lifestyle products.
JPMorgan’s Positive Outlook
Battistini is upbeat about the growth in the sportswear industry, driven by upcoming major sporting events, a sustained recovery in China, and the restocking of inventory with wholesalers. The analyst anticipates robust sales for the company in 2024, driven by its “good brand momentum” and other benefits like more exposure to football.
The company’s margins are also expected to improve as it recovers from selling its Yeezy shoes at a discounted price. Adidas announced its separation from rapper Kayne West due to his controversial statements in 2022. Since then, the company has struggled with reduced demand and consumer interest in the Yeezy line.
Nonetheless, Battistini predicts more upside above the consensus estimates and is “most convinced of the Adidas share.”
J.P. Morgan also recommends buying the UK-based sportswear retailer JD Sports Fashion PLC (GB:JD). Battistini picks JD Sports, considering its prospects for growth, returns, and margins for the next year. She believes that the stock offers the “best valuation” in the sector.
Is Adidas a Good Share to Buy?
Overall, analysts have a neutral stance on the stock and see limited upside potential. On TipRanks, ADS stock has received a Hold consensus rating, backed by a total of 20 recommendations. It includes eight Buy, nine Hold, and three Sell ratings. The Adidas share price prediction is €184.76, which is 4.6% lower than the current level.
