Adidas AG was upgraded to “Outperform” from RBC Capital Markets, as the brand has regained “modest” market share in footwear and apparel over the last two years and is well positioned to capture significantly more.
RBC Capital also hiked its price target on Adidas to €210 from €170 and raised its FY27 revenue estimates by 1 percent and EPS by 3 percent, bringing RBC estimates 1 percent and 2 percent ahead of consensus revenue and EPS targets, respectively.
Shares of Adidas closed Thursday on the Frankfurt Stock Exchange at €173.30.
The upgrade came as RBC Capital downgraded Nike to “Sector Perform” from “Outperform” due to the brand’s slower-than-expected recovery.
Piral Dadhania, RBC Capital’s analyst in the space, said Adidas is on track to deliver EPS at a CAGR (compound annual growth rate) of 25 percent over the next three years while trading at a discount to peers. He wrote, “For 2026, the setup is 1H weighted, which is attractive relative to our wider coverage, and with broad-based momentum already demonstrated in 1Q26 and expected to continue in 2Q26E (regions, categories, sports) with guidance sufficiently conservative.”
Regarding market share, Dadhania said that after losing market share from 2019 to 2023 under previous management, Adidas has gained 80 basis points in footwear and 10 basis points globally in apparel over the last two years to reach 11.2 percent and 5.9 percent in share, respectively, in those categories, according to Euromonitor data and RBC Capital Markets estimates.
Dadhania noted that competition from challenger brands, including On, Hoka, New Balance, Skechers, Asics, and Brooks, in footwear in the U.S., remains “fierce,” with challenger brands steadily gaining global share in recent years amid “ongoing fragmentation” in both footwear and apparel categories.
However, Dadhania believes Adidas has “sufficient headroom” to regain further footwear and apparel market share (relative to its historic peak) with “consistent execution, strong product at competitive price points, full price realization and staying ahead of likely changes in the fashion cycle in the coming quarters.”
He particularly sees potential for share gains in China and North America, given Adidas’ recent momentum in both regions.
He noted that in the first quarter, all regions, excluding Europe, delivered double-digit revenue growth, supported by currency-neutral gains of 12 percent in North America and 17 percent in Greater China. He said Adidas is “arguably gaining market share within challenging marketplaces where most of its peers (e.g., Nike, Lululemon, Puma) are delivering declining revenues and market share losses.”
Dadhania said Adidas has gained 1 percentage point in footwear market share in China since 2023, the most among peers. In sports apparel, Adidas has maintained its share in China, while Lululemon and Arc’teryx have gained share, and Nike and Li Ning have lost share.
The analyst added that while its footwear growth in China has been helped by favorable fashion trends and popular running franchises, it also reflects changes to the business model enacted by Adidas CEO Bjørn Gulden that have favored local design and management. He added that Adidas’ investments in sport partnerships have helped “build credibility with Chinese consumers, where sport participation is a government priority.”
Dadhania said Adidas has “more work required in the U.S.” despite its recent momentum. He said Adidas has “struggled to sustainably establish itself in the U.S. market for decades” against a dominant player in Nike and other established brands such as Skechers, New Balance, Brooks, Lululemon, and Under Armour.
Today, Adidas’ sports footwear market share in the U.S. is 9.5 percent, down from a peak of 11.5 percent in 2022; and its sport apparel market share is 3 percent, down from a peak of 4 percent in 2020.
“The opportunity set in the U.S. remains unchanged,” wrote Dadhania in the note. “Lean into performance sports, build out grassroots and college presence, improve shelf allocation with U.S. retailers, and improve the basketball offer.”
He said Adidas has the potential to gain 500 basis points of market share in the U.S. based on its relevant share in other markets. However, he said Adidas continues to see “mixed signs of progress” in the U.S., and he believes “it’s too early to take a strong view” on the brand’s potential in the U.S.
RBC Capital’s upgrade is supported by “broad-based” momentum being seen by Adidas across regions, categories and sports verticals; its DTC-led growth in recent quarters – including 26 percent currency-neutral growth in the first quarter – that “points to healthy brand heat and organic traffic into own channel,” healthy website traffic trends, and improving Google search data, led by the Samba style.
Catalysts for Adidas’ stock include U.S. tariff rebates, an Innovation Day planned for late September at Adidas’ headquarters in Herzogenaurach, and a potential “re-rating potential” of Adidas’ shares “as the market better understands” its growth trajectory.
Dadhania said Adidas’ shares are 30 percent higher than when Gulden took over as CEO in January 2023, but well below the recent peak of €260 reached in February 2025 as investor concerns over U.S. tariffs, oil prices due to the Iran war, and “conservatism in guidance and tone” by management on quarterly calls have weighed on the stock.
He said Adidas’ earnings growth rate over the next three years, based on consensus estimates, is only behind those of Amer Sports and VF Corp. among its sporting goods peers, and he believes its “consistent execution and revenue/earnings growth” are being undervalued.
Dadhania wrote, “If Adidas can deliver on consensus earnings growth, in the absence of further external shocks, the valuation support for the stock could materialize at least in part in a re-rating to better reflect a better executing business model delivering consistent growth.”
Image courtesy Adidas
