On Tuesday, Adidas’s stock was under pressure.
Adidas’ stock fell Tuesday after a stockbroker gave an unusual double-downgrade, making it the worst-performing company among Europe’s top 600 equities.
The worst-performing part of the Stoxx Europe 600, Adidas stock (XE:ADS), dropped 7% after Bank of America downgraded its rating from buy to underperform.
As analysts stated that the turnaround narrative is well known, that upgrades to profit projections ceased months ago, and that organic sales growth will probably decelerate after the World Cup, Adidas’ price objective was lowered from EUR213 to EUR160.
But Adidas wasn’t the end of the gloom.
While maintaining its neutral recommendation on Adidas’ cross-town rival Puma (XE:PUM) and On Holding (ONON) at buy, the same brokerage downgraded its rating on sporting goods retailer JD Sports Fashion (UK:JD) to neutral from buy.
They pointed out that throughout the previous 18 years, the athletic goods industry’s downturns typically last one to two years. Accordingly, the present downturn, which started in the second quarter of 2023, ought to be coming to a conclusion right now.
However, it isn’t.
“Almost all current KPIs (brand traction, revenue and earnings trends, [Bank of America] card data) and forward-looking KPIs (Asian supplier sales, exports from producing countries, macroeconomic data, company comments on 2026, consensus estimates) support a scenario of continued slow growth,” according to the analyst note written by Thierry Cota. Key performance indicators are referred to as KPIs.
rise in listed sportswear brands’ organic sales. These include: Deckers, Anta, Li Ning, Asics, Columbia, On, adidas, Puma, Nike, Under Armour, and Lululemon.
They said that the 20-year trend toward casualization, which saw sneakers increase from 20% to 50% of footwear sales, was mostly finished with COVID. Additionally, sports participation is not rising, at least not in the United States’ largest market, which accounts for almost 40% of total income.
Analysts now predict that sales will expand at a rate that is comparable to, but not significantly greater than, the global GDP growth rate of roughly 5%, including inflation.
The negative assessment follows a spike in Nike (NKE) stock, which was aided by insider buying.
Although Nike’s comeback is crucial for the industry, the analysts noted that other factors also influence sector cycles.
