Adidas Shares: A Valuation Gap Amidst Investor Caution

Analysts at Berenberg Bank have reaffirmed their "Hold" recommendation for Adidas, presenting a seemingly contradictory stance: they believe the sportswear giant is fundamentally undervalued yet advise against buying its stock. This paradox captures the current predicament facing the company's equity.

Consensus Points Upward, But Sentiment Lags

Following discussions with company management, Berenberg analyst Nick Anderson maintained his price target of 190 euros per share. He reported a positive tone from these meetings and noted the stock's historically low valuation. Despite this, the "Hold" rating persists, attributed primarily to weak investor sentiment overriding what the underlying business fundamentals might otherwise justify.

The broader analyst community is notably more bullish. Among 38 analysts covering the stock, 28 currently advocate a "Buy" position. The consensus average price target stands at approximately 198 euros. With Adidas shares trading at 133.35 euros, this implies a potential upside of more than 40 percent.

Should investors sell immediately? Or is it worth buying Adidas?

Operational Highlights and a Looming Loss

On the operational front, Adidas's football division is sending a strong signal. Sales for the new blue German national team away jersey for the 2026 World Cup have, since its launch on March 20, surpassed the sales figures for the 2024 European Championship kit. This success comes with a significant caveat: the 2026 tournament will be the last major competition where the German team wears Adidas. From 2027, Nike will take over the kit supplier contract, committing to pay at least 100 million euros annually—double Adidas's most recent payment.

Revised Targets Under External Pressure

Adidas has set a target for an operating profit of around 2.3 billion euros in 2026. However, the company anticipates headwinds from U.S. tariffs and negative currency effects, which are estimated to dent earnings by roughly 400 million euros. Consequently, the goal of achieving a 10 percent EBIT margin is now projected for the 2027/2028 period, a year later than initially planned. The first quarter results, scheduled for release on April 29, will provide initial clarity on the year's trajectory.

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