Adidas AG (OTCQX:ADDYY) has been upgraded UBS, which sees the German sportswear giant as better positioned than Nike, citing product strength and operational improvements.
Recent underperformance against the American brand (adidas down 8% versus Nike up 13%) is not seen as fundamental at UBS.
Instead, the Swiss bank reckons Adidas is now a fundamentally better company and "one to own for the long haul".
This led to the analysts upgrading their rating to ‘buy’ alongside a 12-month price target of €279 that suggests upside of nearly 34% from the current price of €208.30.
They reckon the German sports apparel brand has a superior product pipeline, more disciplined franchise management, and has executed structural organizational changes.
The UBS analysts believe the market may be underestimating Adidas’s momentum, which it sees as driven by a steady stream of new product launches.