On Thursday, TD Cowen made an adjustment to the financial outlook for Adidas AG (ETR:ADSGN) (ADS:GR) (OTC: ADDYY), raising its price target to EUR209 from the previous EUR158, while retaining a Market Perform rating for the stock.
The revision follows Adidas (OTC:ADDYY)' disclosure of preliminary fourth quarter results and an early view on the fiscal year 2024 on January 31. The final results and guidance issued by the company echoed the initial projections, highlighting a resurgence in the popularity of its footwear. The company's positive order book trends for fiscal year 2024 are expected to extend to its apparel line.
During the fourth quarter earnings call, Adidas presented in-depth information on its product pipeline, covering both footwear and apparel. The discussion also touched on improvements in company culture and strategies for navigating the complex global market. The tone of the call resembled that of an Investor Day, providing extensive insight into the company's operational plans.
Adidas is emerging from what it has termed a 'reset year' in fiscal year 2023. The company is preparing for a series of product launches and marketing initiatives aimed at driving growth in fiscal year 2024, with the intention of building momentum into fiscal year 2025 and beyond.
The analyst from TD Cowen noted that Adidas appears to be progressing more rapidly in its restructuring efforts than its industry counterparts, such as Nike (NYSE:NKE), VF Corporation (NYSE:VFC), and Puma, positioning it favorably for the upcoming fiscal years.
InvestingPro Insights
Adidas AG (OTC: ADDYY) is poised for a promising fiscal year 2024, as evidenced by the recent price target upgrade from TD Cowen. A closer look at the company through the lens of InvestingPro reveals additional nuances that investors should consider. With a market capitalization of 40.51 billion USD, Adidas is a heavyweight in the Textiles, Apparel & Luxury Goods industry. Despite a slight dip in revenue growth over the last twelve months as of Q1 2023, with a decrease of -4.08%, the company's gross profit margin remains strong at 47.79%.
One of the InvestingPro Tips for Adidas suggests that net income is expected to grow this year, aligning with the company's positive outlook and restructuring efforts. Moreover, analysts predict that Adidas will be profitable this year, which is supported by the company's profitability over the last twelve months. This tip is particularly relevant as it underscores the potential for Adidas to capitalize on its restructuring and new product launches.
From a valuation perspective, Adidas is trading at a high Price / Book multiple of 6.87, indicating that investors are willing to pay a premium for the company's net assets. This could reflect the brand's strong reputation and its anticipated future performance. Additionally, the company's trading near its 52-week high, with a price percentage of 96.65%, suggests that market sentiment is currently positive.
For investors seeking a more comprehensive analysis, there are 11 additional InvestingPro Tips available, which can provide deeper insights into Adidas's financial health and market position. To access these tips and gain a competitive edge in your investment strategy, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
As Adidas gears up for a series of product launches and marketing initiatives in fiscal year 2024, these InvestingPro insights can help investors keep a pulse on the company's financial trajectory and market valuation.
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