Latest news with #adidasAG
Globe and Mail
2 days ago
- Business
- Globe and Mail
The Zacks Analyst Blog Highlights Nike, lululemon athletica and adidas
For Immediate Release Chicago, IL – June 12, 2025 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Nike, Inc. NKE, lululemon athletica inc. LULU and adidas AG ADDYY. Here are highlights from Wednesday's Analyst Blog: Nike's China Recovery Stalls: Can It Regain Its Edge in Asia? Nike, Inc. boasts a solid presence in China, which forms a cornerstone in its global growth strategy. The company has strategically invested in China to reinforce its consumer engagement and gain competitive leverage. Nike's China business, which is commonly referred to as Greater China, delivered revenues of $1.7 billion in third-quarter fiscal 2025, contributing about 15% to total revenues. However, Greater China has remained a challenging market for Nike, weighed down by a difficult operating environment and tariff-related headwinds. In third-quarter fiscal 2025, Greater China revenues plunged 17% on a reported basis (down 15% in constant currency), as Nike Direct sales fell 11%, Nike Digital revenues slid 20% and Nike-owned store revenues dipped 6%. Wholesale performance also weakened, with an 18% year-over-year decline, underscoring persistent consumer and trade pressures across the region. Despite near-term challenges, Nike remains bullish on Greater China's long-term growth potential. To reignite momentum, the company has aggressively cleaned up the marketplace—executing returns and rebates, liquidating excess inventory, and creating space for new product drops and expanded assortments. Management acknowledges China's status as a "mono-brand market," and is committed to patience and precision as it phases in its Win Now initiatives, expecting these actions to boost foot traffic and market share over time. NKE deepens its vast presence in China by customizing product innovation to local tastes, launching culturally resonant marketing campaigns, accelerating research and development activities, and forming strategic alliances with leading Chinese sports and cultural organizations. This concerted effort to embed sport and fitness into everyday life not only deepens consumer engagement but also positions Nike to outpace competitors in its broader Asian markets. NKE's Competition in Asia lululemon athletica inc. and adidas AG are the key companies competing with Nike in China. Like NKE, lululemon seeks to enhance its presence in China, which is among its key global markets. The company has been experiencing solid momentum in its international markets, especially in China. In first-quarter fiscal 2025, revenues increased 21% in Mainland China (22% in constant currency) while comps improved 8%. The company looks forward to strengthening its physical appearance with constant store openings in the international markets, primarily in China. Amid the tariff-driven pressures, lululemon anticipates revenue growth of 25-30% in Mainland China in fiscal 2025, thanks to its distinct product and innovative solutions. Growth in LULU's customer base through its stores and diverse e-commerce platforms, coupled with product innovations and a robust omnichannel operating model, has been bolstering growth in the region. adidas is another sporting goods giant vying for a larger share of the Chinese market. The company is aggressively focused on expanding its presence in China by launching locally relevant product lines and enhancing its brand equity via collaborations and marketing campaigns. Amid a highly evolving geopolitical and macroeconomic environment, adidas has been diversifying its supply chain and adopting mitigating strategies. Initiatives like the "Future City Concept" stores highlight adidas' ongoing commitment to forward retail strategy. Such strategies are likely to offer resilience and sustainability in the long term. NKE's Price Performance, Valuation and Estimates Shares of Nike have lost around 15.5% year to date compared with the industry 's decline of 14%. From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 32.5X, higher than the industry's average of 25.76X. The Zacks Consensus Estimate for NKE's fiscal 2025 and 2026 earnings implies a year-over-year plunge of 46.1% and 8.7%, respectively. The company's EPS estimate for fiscal 2025 and fiscal 2026 has been stable in the past 30 days. Nike stock currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Why Haven't You Looked at Zacks' Top Stocks? Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year. Today you can access their live picks without cost or obligation. See Stocks Free >> Media Contact Zacks Investment Research 800-767-3771 ext. 9339 support@ Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NIKE, Inc. (NKE): Free Stock Analysis Report lululemon athletica inc. (LULU): Free Stock Analysis Report Adidas AG (ADDYY): Free Stock Analysis Report
Yahoo
27-02-2025
- Business
- Yahoo
Those who invested in adidas (ETR:ADS) a year ago are up 31%
The simplest way to invest in stocks is to buy exchange traded funds. But investors can boost returns by picking market-beating companies to own shares in. For example, the adidas AG (ETR:ADS) share price is up 30% in the last 1 year, clearly besting the market return of around 17% (not including dividends). That's a solid performance by our standards! The longer term returns have not been as good, with the stock price only 20% higher than it was three years ago. Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business. Check out our latest analysis for adidas To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. During the last year adidas grew its earnings per share, moving from a loss to a profit. When a company is just on the edge of profitability it can be well worth considering other metrics in order to more precisely gauge growth (and therefore understand share price movements). We are skeptical of the suggestion that the 0.3% dividend yield would entice buyers to the stock. We think that the revenue growth of 3.2% could have some investors interested. We do see some companies suppress earnings in order to accelerate revenue growth. You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values). adidas is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates. It's nice to see that adidas shareholders have received a total shareholder return of 31% over the last year. And that does include the dividend. That's better than the annualised return of 0.3% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow. But note: adidas may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
05-02-2025
- Business
- Yahoo
Is There An Opportunity With adidas AG's (ETR:ADS) 36% Undervaluation?
The projected fair value for adidas is €398 based on 2 Stage Free Cash Flow to Equity adidas' €254 share price signals that it might be 36% undervalued Our fair value estimate is 52% higher than adidas' analyst price target of €262 In this article we are going to estimate the intrinsic value of adidas AG (ETR:ADS) by projecting its future cash flows and then discounting them to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. It may sound complicated, but actually it is quite simple! We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. View our latest analysis for adidas We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (€, Millions) €1.69b €2.32b €2.55b €2.89b €3.22b €3.44b €3.62b €3.77b €3.88b €3.98b Growth Rate Estimate Source Analyst x7 Analyst x6 Analyst x1 Analyst x1 Analyst x1 Est @ 7.10% Est @ 5.26% Est @ 3.97% Est @ 3.07% Est @ 2.44% Present Value (€, Millions) Discounted @ 5.7% €1.6k €2.1k €2.2k €2.3k €2.4k €2.5k €2.5k €2.4k €2.4k €2.3k ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = €23b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 1.0%. We discount the terminal cash flows to today's value at a cost of equity of 5.7%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = €4.0b× (1 + 1.0%) ÷ (5.7%– 1.0%) = €85b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €85b÷ ( 1 + 5.7%)10= €48b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is €71b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of €254, the company appears quite good value at a 36% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at adidas as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 5.7%, which is based on a levered beta of 1.154. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Strength Debt is not viewed as a risk. Weakness Dividend is low compared to the top 25% of dividend payers in the Luxury market. Opportunity Annual earnings are forecast to grow faster than the German market. Trading below our estimate of fair value by more than 20%. Threat Revenue is forecast to grow slower than 20% per year. Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for a company. DCF models are not the be-all and end-all of investment valuation. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Why is the intrinsic value higher than the current share price? For adidas, we've put together three fundamental elements you should look at: Financial Health: Does ADS have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk. Future Earnings: How does ADS's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the XTRA every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
