Adidas defies difficult market conditions.

Last Updated: 11. Dezember 2023By

I have invested in stocks that I have a basic trust in, even if there is a year that doesn’t go as smoothly as one might be used to. I’m speaking of Adidas. It was already apparent that after the departure of the former CEO, Kasper Rorsted, a difficult time would come for the „new“ CEO, Björn Gulden. At the time, the news at the company was characterized by declining sales in China and an additional disaster around the brand Yeezy and its designer and musician Kanye West.

2023 was a transition year So Gulden could only describe 2023 as a transition year in which things could be quite ambitious for the sporting goods company.

Muted growth expectations coupled with a phase of consolidation are still on the reporting agenda of the new CEO.

The long-term outlook is important His credo is always about the importance of the company’s long-term strategies.

Accordingly, he currently sees Adidas on a consolidation course that is oriented towards long-term growth and especially next year 2024 to realize the internal plans in order to achieve even better results in 2025.

As a concrete margin target, in the current business situation, Gulden sees a profit margin of 10% as realistic and can thus be described as cautious.

The manager was already cautious at the time of taking office and probably did not want to appear too confident.

The stock has been able to hold its own in a difficult environment His plan and work are right, because despite all adversity, Adidas has really had a good stock market year, which one would not have expected at the beginning of the year.

On last Friday the papers closed at 193.04 euros, only 7 euros away from the 200 euro mark. A year ago the share was only at 116.70 euros. So a good performance in a really difficult market environment.

The Adidas shares put on a strong recovery rally on the stock exchange this year. This was due on the one hand to the lower Yeezy write-downs and on the other hand to Gulden himself, who managed to get the company back on track and at the same time to regain trust.

Analysts are in a positive mood Understandably, some analysts are quite positive and expect a pleasant business development for 2024. For example, the analysts from the house of Bernstein, who recently issued a new rating for the Adidas share, with the rating „Outperform“ and a price target of 205 euros.

The analysts of RBC are somewhat more cautious, but at least they have adjusted their price target from 175 euros to 200 euros and kept the rating at „Sector Perform“.

Much clearer is the Frankfurt investment bank Metzler, with a current price target of 216 euros and a buy recommendation – „buy“.

Adidas has managed to perform despite all difficulties and to give a positive outlook. With foresight and patience you will be rewarded on the stock exchange.

And that’s exactly the stocks I value in my portfolio and like to keep a little longer – even if it’s difficult and ambitious. That is also the reason why I have always recommended to you to take advantage of the bargain prices after the strong correction of the share. I hope you followed my advice. Foresight and above all patience are rewarded on the stock exchange, especially when it comes to quality companies.