Adidas AG faced a significant setback on Tuesday as Bank of America Corp. instituted a rare sell recommendation for the stock, indicating challenging times ahead for the iconic German sneaker brand.
The unexpected downgrade led to a plunge in shares, falling as much as 7.6 percent. Analysts, spearheaded by Thierry Cota, anticipate a drop to single-digit sales growth this year. Additionally, they noted that Nike Inc.’s resurgence poses a potential threat, while brands like On, Asics, and Puma could capture more market share. Consequently, the bank revised its rating from buy to underperform.
This development marks a stark contrast to the prevailing optimism among analysts. Despite a rocky 2025 where Adidas lost nearly 30 percent of its value due to currency fluctuations affecting earnings, around 84 percent of those tracked by Bloomberg still favor a buy or equivalent rating.
While Bank of America predicts that the upcoming 2026 FIFA World Cup will provide a temporary uplift, they caution that subsequent growth rates may slow. The analysts expressed concerns for the broader sector, downgrading JD Sports Fashion Plc and concluding that the two-decade “casualization trend” may be reaching its end.
“The real question is what follows the World Cup surge,” wrote analysts, including Cota. “We foresee brands with consistent and solid growth, like On and Asics, grabbing attention in a marketplace where investor enthusiasm is dwindling.”
The bank has adjusted its price target to €160 ($187), establishing the lowest estimate among analysts and suggesting approximately a 6 percent decline from its previous close. As of 11:08 a.m. in Frankfurt, the stock was trading at €158.60.
By Isolde MacDonogh
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