Adidas stock has taken a hit in the past few weeks after a strong end of year rally and a significant 50% increase in value before Christmas. As of today (January 15th, around 12 PM), the stock is trading about 10% lower than during the holiday season. One of the reasons for this decline was the weak numbers from market leader Nike, which had a negative impact on Adidas stock.

However, this current weakness may only be a temporary setback, as the outlook for 2024 is very promising for the DAX-listed company. A stronger demand is expected, the inventory levels are not as high, and major sporting events will put Adidas in the spotlight in the summer.

Good prospects for Adidas When the European Football Championship takes place in Germany in June 2024, followed by the Olympic Games in Paris at the end of July, this is likely to boost not only the sports industry giants like Nike, Puma, and Adidas. Although the boost from these events is usually not sustainable, the focus of investors‘ interest will shift towards these sports companies.

In addition, Adidas expects a recovery in demand in 2024 after a challenging year in 2023. At the same time, the inventory levels have been reduced, and the special sale of unwanted Yeezy products performed better than expected. Overall, the outlook for Adidas in 2024 is good to very good.

Adidas stock: Opportunities are there – but what is already priced in? As an investor, it is important to keep in mind that the stock market trades on future expectations. This is evident in the discrepancy between business performance and stock price in 2023. Despite being a „transition year“, Adidas stock was one of the biggest gainers in the DAX. This means that a lot of optimism is already priced into the stock.

The amount of optimism already priced in also depends on the actual targets for the fiscal year 2024. The Q4 results of Adidas, which are expected in early March, will be closely watched – especially the outlook for the current year, which could provide new impulses for the stock. Pullbacks like the recent one could potentially be helpful in this regard.

Most analysts still have a positive outlook for Adidas stock. JPMorgan recently maintained their „Overweight“ rating, while Bernstein Research kept their price target at 200 euros. However, there are also some critical voices: In the first trading week of 2024, Hauck & Aufhäuser confirmed their „Sell“ rating and only see a price target of 100 euros – currently, Adidas stock is trading at 175 euros.

Source: https://aktienscreener.com/