Adidas AG: Navigating Tariff Risks with Brand Strength and Strategic Adaptation

John Kernan, an analyst from TD Cowen, maintained the Hold rating on adidas AG (0OLD – Research Report). The associated price target was raised to €227.00.

John Kernan’s rating is based on a combination of factors that reflect both opportunities and challenges for adidas AG. The company is currently facing potential risks from US tariff policies, which could significantly impact earnings per share estimates across the sector. Despite these risks, adidas’s brand strength and pricing power provide a foundation to endure various scenarios, as evidenced by strong order books and consistent demand.
Furthermore, adidas’s brand appeal appears to be more sustainable this time, with a broader reach across different sporting and product categories, enhanced localization strategies, and diversified innovation. While the company’s FY25 guidance remains conservative, it is supported by positive feedback from both trade and consumers, particularly in the adidas Running segment. The management’s strategies to mitigate tariff impacts, such as adjusting inventory and pricing, also contribute to the Hold rating, as these efforts are seen as viable ways to navigate the current economic landscape.

Kernan covers the Consumer Cyclical sector, focusing on stocks such as Ralph Lauren, Nike, and TJX Companies. According to TipRanks, Kernan has an average return of 6.8% and a 51.11% success rate on recommended stocks.

In another report released yesterday, Berenberg Bank also maintained a Hold rating on the stock with a €230.00 price target.