Deutsche Bank reiterates a Buy rating on Adidas (OTCQX:ADDYY) and takes its price target to €345 on small upward changes to estimates. The firm thinks the power of the Adidas brand is on the rise.
Analyst Adam Cochrane: "The perception issue is one of a comparison to Nike, Puma and the upper tier of luxury goods companies as even best-in-class global retailers such as Inditex would be hard pressed to deliver DD% earnings growth. As a clear No. 2 in the global market, the quality of the adidas brand and the machine driving it should not be overlooked. Management has taken actions to improve the focus of the group with the Reebok sale and increase the direct relationship with the consumer through DTC."
Cochrane notes that China is currently the biggest issue for Adidas (OTCQX:ADDYY) and expects Q4 to be weak for the region. However, the latest Deutsche Bank data suggests that on a relative basis China may have troughed for the German athletic apparel company and is positive on the outlook for this year.
Earlier this month, Adidas authorized new buybacks.