Citi | adidas (ADSGn.DE) Model Update
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Citi maintains its Buy on adidas ahead of the company's 24 September Innovation Day and 29 October third-quarter results, trimming its DCF-based target price from EUR204.00 to EUR200.00, which implies 38.3% upside to the EUR144.65 share price (16 September 2026). FY26e constant-currency sales growth is nudged down to +9.9% (previously +10.1%; consensus +10.2%; guidance +9-10%), with 3Q26e constant-currency growth of +6.3% after reweighting the third and fourth quarters. Third-quarter marketing spend rises EUR75m year-on-year on July's World Cup outlay, keeping FY26e marketing at 12.4% of sales, while the gross margin assumption excluding tariff refunds drops to 51.5% from 52.5%, closer to 1Q26's 51.1%. Incorporating slightly higher 3Q26e other operating expenses, Citi forecasts 3Q26e EBIT of EUR749m and FY26e EBIT of EUR2,421m—1% below consensus and 5% above the company's roughly EUR2.3bn guidance. The updated model shows 2026E revenue of EUR26,768.7m, diluted EPS of EUR9.40, DPS of EUR3.76 and a 15.4x P/E. Scenario values are EUR273.40 bull, EUR200.00 base and EUR121.70 bear (105pp spread), using an 8.5% WACC and 3.3% long-term growth.