Analyst Note
| David Swartz |Overcoming challenges regarding logistics (port congestion and shipping delays), the pandemic, and a political controversy in China, narrow-moat Adidas beat our sales and earnings estimates in 2021’s first quarter as athletic gear remains in demand. We think momentum will continue as the effects of the pandemic fade in North America and Europe, and we expect to raise our EUR 197/$116 fair value estimates by a mid-single-digit percentage. However, we view the shares, which surged about 8% on the report, as very overvalued.