Key Updates
Adidas AG shares kept falling, down 2.76% to $181.30 since the last report. Despite strong Q3 results and an FY25 outlook upgrade, the stock is under pressure for the fifth straight trading day (down 4.18% over 5 days). New data on the custom-shoe market and competitor activity send mixed signals to investors.
Current Trend
Adidas is in a clear downtrend on the medium term, off 13.83% over the past six months. Short-term momentum remains negative (down 4.18% over 5 days), indicating a continued correction after the October highs. The monthly move is almost flat (+0.11%), suggesting consolidation in the current price range.
Investment Thesis
The thesis rests on restored operating efficiency after the Yeezy crisis, growth in key segments and exposure to the expanding custom-shoe market. The company delivered strong Q3 results and raised its FY25 forecast, confirming the recovery strategy is working.
Thesis Status
The thesis remains broadly positive despite the recent price decline. Fundamentals are improving, as shown by the FY25 outlook upgrade. However, market sentiment stays cautious, reflected in the ongoing post-earnings correction.
Key Drivers
Main drivers include a growing custom-shoe market projected to reach $8.54 billion by 2035, competitor activity such as new Lululemon partnerships and Puma’s retail reorganization. Analysts continue to assess investment opportunities after a 20.8% YTD drop.
Technical Picture
Technically the stock is in a correction phase with a downtrend forming. The current level of $181.30 acts as intermediate support. A break below could test deeper support zones. Trading volume remains moderate, indicating no panic selling.
Bull Case
- Growing custom-shoe market with a 4.3% CAGR to 2035 creates new growth avenues (PR Newswire)
- Strong Q3 results and FY25 outlook upgrade confirm the recovery strategy (previous analysis)
- Resolution of the Yeezy crisis and stabilization of operations (previous analysis)
- Potential margin and cash-flow recovery (previous analysis)
- Analysts view current levels as an investment opportunity after a sizable correction (Simply Wall St)
Bear Case
- Continued price decline (down 4.18% over 5 days) signals lingering investor negativity
- Increased competition from Lululemon’s new partnerships (StockStory)
- Puma’s active retail reorganization with talent from Nike and Adidas (Footwear News)
- Significant YTD drop (-20.8%) creates a negative technical backdrop (Simply Wall St)
- Medium-term correction (down 13.83% over 6 months) could extend if market conditions worsen