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adidas AG ADDYY

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Morningstar’s Analysis

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Despite Distractions, Narrow-Moat Adidas Posts Solid Q1 on Strong Demand; Shares Expensive

David Swartz Equity Analyst

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.

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Company Profile

Business Description

Adidas designs, develops, produces, and markets athletic and leisure apparel, footwear, accessories, and sports equipment. Under its eponymous brand, it produces apparel for competitive athletics, casual activewear, and casual fashion. Its fashion brands include Yeezy, Ivy Park, and Y-3. Adidas sells its products in more than 160 countries through more than 2,400 owned retail stores, 15,000 mono-branded franchise stores, 150,000 wholesale doors, and more than 50 e-commerce sites. The company was founded in 1949 in Germany.

Adi-Dassler-Strasse 1
Herzogenaurach, BY, 91074, Germany
T +49 9132840
Sector Consumer Cyclical
Industry Footwear & Accessories
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type
Employees 62,285