Adidas shares: plunge after outlook

Last Updated: 1. Februar 2024By

Adidas stock has plummeted 8% (as of 10am, February 1, 2024) after the preliminary figures for the 2023 fiscal year and the forecast for the current year were released. The disappointing outlook for 2024 has disappointed investors, as the previous year ended surprisingly with positive results.

According to Adidas, negative currency effects are responsible for the cautious outlook for the current year, which is impacting profitability. Despite this, most analysts continue to have a positive outlook for the Adidas stock. Following the recent figures, several analysts have confirmed their price targets.

Adidas: 2023 performed better than expected With preliminary figures showing a turnover of 21.4 billion euros in the last year, Adidas saw a decrease of 5% compared to 2022. Without negative currency effects, the turnover would have been at the same level as the previous year. The positive surprise was that Adidas ended 2023 with positive results after all.

After 9 months, the company had expected a loss of 100 million euros – now the operating profit is at 268 million euros (previous year: 669 million euros). This is due to two reasons: firstly, the fourth quarter, including the holiday season, performed better than expected and secondly, Adidas will not write off the remaining Yeezy shoes as planned. These are expected to be sold at a break-even point in 2024 and generate around 250 million euros in turnover.

However, the outlook for the current fiscal year has disappointed expectations. Turnover is expected to increase in the high single-digit percentage range, thanks to improvements in the second half of the year, and the operating profit for 2024 is estimated to be around 500 million euros.

Adidas stock falls – many analysts maintain price targets While investors and analysts were expecting more from the outlook, Adidas is being cautious due to challenges in North America and negative currency effects. CEO Bjørn Gulden sees this year as a „building block to make Adidas a company with double-digit growth again.“

While the Adidas stock price has plummeted after the 2024 outlook, analysts are remaining calm. Although Deutsche Bank has lowered its price target from 220 to 200 euros, they still see potential in the stock. Others such as JPMorgan, Jefferies, UBS, and Baader Bank have maintained their price targets for the Adidas stock.