Deutsche Bank Research has lifted its price target on Adidas shares to €210 and raised its profit forecasts for 2026 and 2027, citing strong second-quarter momentum driven by World Cup demand and improving brand appeal. The move signals growing confidence that the sportswear giant can deliver sustained earnings growth even as revenue expansion may slow later next year.
What's behind the upgrade
In a research note published Monday, Deutsche Bank analysts said they expect Adidas to report robust second-quarter sales growth once currency fluctuations are stripped out. The bank pointed to two key drivers: “improving brand heat” — a measure of consumer buzz and desirability — and the upcoming World Cup, which typically boosts demand for athletic footwear and apparel.
However, the bank also cautioned that sales growth could peak in the first half of 2026 and cool in the second half. That means Adidas’ next phase of value creation will depend less on accelerating revenue and more on expanding profit margins through better gross margins and tighter cost control.
Higher profit forecasts
Deutsche Bank nudged up its 2026 earnings before interest and taxes (EBIT) forecast to €2.55 billion and its 2027 EBIT estimate to €3.01 billion. EBIT is a measure of operating profit that strips out interest and taxes, giving investors a clearer view of a company’s core profitability.
The bank also raised its earnings per share (EPS) forecasts — EPS is net profit divided by the number of shares, a key metric for valuing a stock — to €9.83 for 2026 and €12.16 for 2027. Revenue forecasts for 2026 through 2028 were also edged higher.
Deutsche Bank noted that the 2026 EPS estimate is moving back toward the roughly €10 level that prevailed before US tariffs weighed on investor expectations. That suggests the bank believes Adidas can absorb or offset tariff-related headwinds better than previously feared.
What it means for investors
To decode the new €210 price target, it helps to look at the valuation multiple. Dividing €210 by Deutsche Bank’s 2026 EPS forecast of €9.83 gives a price-to-earnings (P/E) ratio of roughly 21 times forward earnings. Because the bank raised its price target by about 5% while lifting its 2026 EPS estimate by 4.2%, the P/E multiple barely changed. That means the upgrade is mostly earnings-driven rather than a shift in how much investors are willing to pay for each euro of profit.
In practice, that frames Adidas’ story as “execute on margins” — improve gross margins and keep operating costs lean — especially if sales growth eases later in 2026 as Deutsche Bank expects. For everyday investors, the key takeaway is that Adidas’ near-term performance hinges on profitability gains rather than runaway revenue growth.
This kind of analyst upgrade is one of many signals investors watch to gauge a company’s trajectory. For context, other recent analyst moves include RBC cutting Heidelberg Materials' price target on currency headwinds, showing how exchange rates can affect global companies. Meanwhile, RBC Capital Markets raised its S&P 500 target to 8,150, reflecting broader optimism about the economy.
The broader picture
Adidas has been working to rebuild its brand after a rocky period marked by the end of its Yeezy partnership and inventory challenges. The World Cup offers a major marketing platform, and the company has been investing in new product launches and athlete endorsements to regain momentum.
Investors will be watching the company’s next quarterly report for evidence that brand heat is translating into actual sales and that margin improvements are on track. If Adidas can deliver on both fronts, the stock could continue to attract analyst upgrades. But if revenue growth fades faster than expected or costs creep higher, the margin-driven thesis could come under pressure.
For now, Deutsche Bank’s upgrade adds to a cautiously optimistic view: Adidas appears to be in a sweet spot of cyclical demand and operational improvement, but the real test will be sustaining profitability once the World Cup boost fades.
