adidas (XTRA:ADS) Climbed, What Is Behind The Latest Attention?

adidas (XTRA:ADS) is back in focus after raising its full year 2026 earnings guidance to an operating profit level of around €2.3b, alongside reporting second quarter and half year results.

See our latest analysis for adidas.

The updated guidance and solid second quarter figures have kept adidas in the spotlight, with the share price at €167.35 after a 2.01% 1 day share price return and a 17.85% 90 day share price return. The 1 year total shareholder return of 3.83% contrasts with a 5 year total shareholder return that declined 43.73%, suggesting recent momentum is firming after a weak multi year experience for long term holders.

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Bulls point to adidas lifting its 2026 profit goal and recent share price strength. Bears focus on the weak 5 year return and leadership change. Which side does the current valuation case support next?

Most Popular Narrative: 19.4% Undervalued

The most followed narrative on adidas places fair value at about €207.59, compared with the last close of €167.35, which implies a sizeable value gap that hinges on growth and margin assumptions playing out.

The accelerating global health and fitness movement is driving strong demand for adidas' performance and athleisure product categories, as demonstrated by double-digit growth in key segments like Running (+25%), Training (+20%), and Basketball, positioning the company for sustained volume expansion and recurring sales growth (impacts revenue and earnings).

Read the complete narrative.

It is worth examining what kind of revenue pace and margin lift would need to align with that profit outlook. The narrative emphasizes compounding earnings, richer profitability and a future valuation multiple that reflects adidas maintaining its premium.

Result: Fair Value of €207.59 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, investors still need to weigh risks such as higher U.S. import tariffs pressuring adidas margins, as well as intensifying competition in North America challenging its market share assumptions.

Find out about the key risks to this adidas narrative.

Another View on adidas Valuation

The first narrative points to adidas looking around 19.4% undervalued based on future earnings assumptions and analyst targets. Yet the current P/E of 21.1x sits above a fair ratio of 16.7x, even if it is in line with the European Luxury average and below peer levels. That gap suggests investors need to weigh whether paying more than the fair ratio is acceptable for this stock, or whether the optimism in the earnings story is already largely reflected in the price.

To see how the current pricing compares on this measure with both industry and peer averages, and what that might indicate for upside or downside risk, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With sentiment split between adidas' renewed earnings guidance and its mixed long term return record, it can help to review the full picture yourself and move quickly while the data is still fresh. To see both the potential upside and the key issues raised by investors, start with the 4 key rewards and 1 important warning sign

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Do not stop at adidas alone. Spend a few minutes with these focused stock lists and you could surface ideas that fit your goals better than sticking to familiar names.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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