JPMorgan Analyst Coverage Update
JPMorgan analyst Wendy Liu announced a more constructive stance on European sporting‑goods equities, reinstating Overweight coverage on Adidas AG and On Holding AG. She assigned a €230 price target to Adidas and a $51 target to On, both with a December 2027 valuation horizon. Liu forecast Adidas to deliver 14% top‑line growth and 16% EBIT growth in the second quarter, while On is projected to achieve 26% revenue expansion and a 45% rise in adjusted EBITDA for the same period.
For Puma SE, Liu upgraded the rating from Underweight to Neutral and set a €26 price target, citing a 29% equity stake purchase by China’s Anta Sports that provides attractive takeover optionality. Despite the upgrade, she expects Puma to record a 9% constant‑currency sales decline and an EBIT loss of €61 million in Q2. JD Sports Fashion plc was initiated at a Neutral rating with a 90‑pence target; Liu noted limited near‑term profit upside because of continued exposure to a still‑struggling Nike and a promotional‑heavy UK and European market environment.
Liu characterised the sector as split between a “Consistent‑Delivery” camp (Adidas and On) that have delivered steady results but face compressing valuation multiples, and a “Reset & Rebuild” camp (Puma and JD Sports) where expectations have been lowered following company‑specific turnaround efforts. She observed that shares in the consistent‑delivery group have underperformed those in the reset group over the past twelve months, even as EPS estimates for Adidas and On have risen, leaving both stocks trading at roughly 14‑times and 16‑times two‑year forward P/E respectively.
Across the broader sporting‑goods landscape, Liu highlighted a promotional environment persisting into the third quarter, partially offset by tailwinds from the ongoing World Cup, easing freight costs, and a softer U.S. dollar that should support margins through 2027.