- RBC Capital Markets trims Adidas revenue outlook but raises EPS estimates for 2025 and 2026.
- Rising US tariff uncertainty creates a major risk for 20% of Adidas’s revenue exposure.
- Despite strong Q1 demand, stock continues to trend downward, testing investor sentiment.
- Adidas lost 20% in a Quarter
Adidas Forecast Slashed by RBC Amid Alarming Tariff Uncertainty
RBC Capital Markets has sounded the alarm on Adidas, revising both its revenue and earnings forecasts while flagging significant concerns related to US tariffs. Despite the brand’s “healthy momentum” in the first quarter of 2025, analysts at RBC have taken a more cautious stance, highlighting a series of financial and geopolitical challenges that could impact future growth.
The German sportswear giant has continued to impress with solid product demand across key markets, but that hasn’t stopped analysts from trimming their top-line projections. RBC has now lowered its 2025 revenue forecast to €26.23 billion (from €26.28 billion) and 2026 to €28.58 billion (from €28.64 billion). On a more optimistic note, earnings per share (EPS) projections were revised upward to €8.32 for 2025 and €11.78 for 2026, suggesting improved operational efficiency.
Alarm Bells Ring Over Tariff Exposure
One of the most alarming issues highlighted in RBC’s latest report is the looming threat of US tariffs. The analysts emphasized that nearly 20% of Adidas’s revenue is potentially exposed to these import duties, significantly raising the stakes for investors.
Even though there have been no immediate order cancellations or price adjustments, the “tariff overhang” continues to weigh heavily on the company’s valuation. RBC noted, “We see re-rating potential post US tariff clarification as current valuation does not adequately reflect earnings momentum, assuming Adidas continues delivering and Nike remains in recovery mode.”
This alarming trend underscores how external factors, especially geopolitical trade policies, can swiftly alter investor sentiment—even for companies with strong fundamentals.
Resilient Demand, But Sentiment Remains Fragile
Despite macroeconomic headwinds, Adidas has shown remarkable resilience in customer demand. The first-quarter performance reflected healthy momentum, particularly in European and Asian markets. However, the market has not responded positively. The Adidas stock continues to slide, reflecting broader investor anxiety over what lies ahead.
Interestingly, while revenue forecasts have been slightly reduced, EPS has gone up. This suggests Adidas is finding ways to operate more profitably, possibly through better cost controls or favorable currency exchange rates. Still, the overriding concern remains: the alarming uncertainty surrounding US trade policy.
Investor Confidence Shaken by Alarming Signals
The alarming message from RBC to the market is clear: proceed with caution. Although the research firm maintains an outperform rating on Adidas, they underscore that this rating is contingent on several factors—including successful navigation of ongoing tariff risks and continued underperformance from main rival Nike.
Their price target remains €275, suggesting confidence in long-term recovery if current risks are managed effectively. However, the short-term signals are undeniably alarming for stakeholders, especially given the downward momentum in Adidas’s stock performance.
Adidas at a Crossroads: What Comes Next?
RBC’s warning comes at a critical time. With major global sports events around the corner and competitors struggling, Adidas has a window to strengthen its market position. But the company must tread carefully, especially in terms of supply chain exposure and tariff strategy.
The alarming scenario would be if US tariffs are implemented more aggressively, which could squeeze Adidas’s margins or force pricing adjustments. Either outcome could delay the company’s growth trajectory and strain its relationship with retail partners and consumers in North America.
For now, the market remains cautious. Investors are looking for clearer signals on US trade policy and Adidas’s ability to maintain momentum amid the uncertainties.
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