Adidas has its target price increased by the Royal Bank of Canada (TSX:RY) (RBC), which is “looking forward to new leadership approach” following the Kanye West debacle.
Specifically, former Puma boss Bjorn Gulden becoming CEO should offer some relief, although the turnaround will take time.
RBC said, with current headwinds well flagged for the German retailer, that the focus shifts to future.
2023 includes many challenges, said RBC, most notably the loss of profit and revenue from Kanye West's Yeezy products.
Although adidas still plans to sell the Yeezy designs, analysts at the UK arm of the Canadian bank are not convinced it will be as successful as the company suggests.
As a result, it expects full-year guidance for 2023 to be below current consensus expectations and potential resetting of further longer-term targets under the new management.
RBC kept adidas at a sector 'perform', but added that it prefers its competitors, Nike and Puma, which it rates as an' outperform'.