2023/02/26 (178.041) Technical Analysis

Bulls/Bears Fight In The ADIDAS Share
Around 137.10 EUR And/Or 137.06 Is Opend

Are the Adidas share on the way down?
Adidas has to admit defeat to Puma for 2022, but the numbers of the eternal competitor also hold some hope!

Puma posted higher profits than Adidas in 2022.
However, both companies are cautious about 2023.
Good figures from the competition could also helping.

Puma recently presented the figures for 2022 and was able to report a lot of positive things.
The company itself speaks of a record year and after Adidas was weakening badly, Puma was able to leave its big competitor behind, at least in terms of profit. The year 2023 is viewed with caution, but there is still potential for growth. Those responsible recognize that in China, for example, and this statement is a bit of salt in Adidas’ wounds. After all, the group with the three stripes is having a hard time gaining a foothold in the gigantic Chinese market. Puma seems to have the more convincing products for the local customers at the start.

But there is reason for hope – and that not only because of my technical analysis 4XSetUps!
Much more because of the desastrous story of the scandal rapper; what seems to be left behind meabwhile…

For optimists, however, the strong numbers of the competition give at least some reason for hope at Adidas. Because on the one hand there are signs that the industry is still strong and on the other hand the good figures at Puma last year are still the responsibility of the then boss Björn Gulden.
Should Investors Sell Immediately? Or is it worth joining Adidas? That`s why let`s get an overview about the last earning numbers…

Quarter Mio. € Quarter Mio. € Quarter Mio. € Quarter Mio. €

30.09.2022 347 30.06.2022 294 31.03.2022 482
31.12.2021 201 30.09.2021 960 30.06.2021 397 31.03.2021 558
Development of net profit at Adidas

Since the beginning of this year, he has been in charge of the fortunes at Adidas and if the developments at Puma are a reliable indicator, he seems to understand his job well. This at least gives rise to the hope that Gulden will now also get Adidas back on course, although this will hardly happen overnight.
Mini gains for Adidas stock At least the Adidas share was able to post small gains in early trading today and rose by 0.3 percent to EUR 142.05 by the morning. Technically, the paper does not tear out any trees with such gains. Of course, anything is better than looking at red signs again. We can only hope that Adidas will be able to provide good news again as soon as possible and not just leave it to the competition.

Adidas stock is treading water

The price of the Adidas share is currently hardly changed compared to the last listing of the previous trading day. Currently, only a price increase of 0.14 percent is on the course board. This corresponds to an increase of 20 cents. Buyers on the stock exchange are currently paying EUR 139.36 for the security. With the gain being negligible, Adidas stock underperforms the broader market as measured by the Euro Stoxx 50 (Euro Stoxx 50). It is currently trading at 4,267 points. This corresponds to an increase of 0.20 percent compared to the closing price of the previous day. The Adidas share price recorded its lowest price to date on December 19, 1995. At that time, the share cost 8.99 euros, ie 130.37 euros less than today.

This is how the shares of the competitors are doing

Adidas faces various competitors in the market. For example, Puma’s paper (Puma share) is currently also in the black. Puma rose 1.23 percent. On the other hand, the security of competitor Nike (Nike shares) is currently not in demand. Nike shares fell 0.55 percent.

This is how analysts see Adidas stock
The stock of Adidas was again observed and rated by two analysts on Monday, early last week

The US investment bank Goldman Sachs left the rating for Adidas on “neutral” with a price target of 140 euros. Analyst Richard Edwards revised his estimates for companies in the European household and consumer goods sector according to updated economic forecasts for growth and inflation in 2023 and 2024. For the euro area, Goldman economists have their estimate for employment growth in the current year of 0.4 percent revised up to flat, Edwards wrote in Monday’s study. A recession is no longer expected in the euro region.

The Swiss bank Credit Suisse left the rating for Adidas at “Underperform” with a price target of 103 euros. The significantly weaker than expected sales and profitability targets for 2023 are no trifle, analyst Simon Irwin wrote in a study available on Monday. This shows how big the task is to restore the brand and the margin structure of the sporting goods group. The expert remains cautious in this regard.

Adidas after the handover – after the Kanye West disaster – this is the current theme that will drive the stock up/down

The sporting goods manufacturer with the three stripes recently had to deal with a number of negative messages. The new CEO, Bjørn Gulden, could herald the turnaround. The adidas share price has been on a roller coaster ride in recent months. Initially, it fell sharply from a good 336 euros in August 2021 to 93.40 euros in November 2022. After that, the new CEO provided tailwind. The share is currently trading at more or less 140 euros.

Bad news priced in? That’s what I’m wondering!

In the summer of 2022, the Herzogenaurach-based company announced that Kasper Rorsted would be leaving the company after six years.
The Dane showed little flair for innovation. When the company figures were announced in November last year, adidas still reported an increase in sales in the third quarter of 11.4 percent to 6.4 billion euros. Declining business with China was offset by other regions. The cooperation for the “Yeezy” brand with US rapper Kanye West proved to be a burden for the company. Before Christmas, adidas ended the collaboration due to the musician’s anti-Semitic statements. The end of the cooperation is expected to put adidas in the red operationally in 2023. Deutsche Bank assumes a minus of 424 million euros. However, the company’s analysts still see the price target for the adidas share at EUR 160 after EUR 170 last and are sticking to their buy recommendation. The bad news is largely on the table, future surprises are likely to be more positive in nature. Investors keep an eye on March 8th, when adidas reports last year’s results.

New man at the helm!
I’ll give him and the stock a chance as long as the stock trades above our stop price…

The new CEO Bjørn Gulden, who played four times as a soccer player for 1. FC Nürnberg in the 1980s, switched from competitor Puma to adidas at the beginning of the year. With a refreshment of the product pipeline and innovations for the company, he should inspire customers and investors again for the three stripes brand. The CEO change caused euphoria among investors. Within a few weeks, the adidas price rose by almost 73 percent. In the current year, the company should benefit from the cost-cutting programs that were launched by Rorsted. In addition, for the first time in 50 years, the launch of a new label at adidas is on the agenda, with Jenna Ortega, star of the Netflix series “Wednesday”, becoming the brand ambassador. In addition, the Herzogenaurach-based company has set up a brand cooperation with the world market leader in group fitness, Les Mills. Les Mills makes its training programs available in 21,000 gyms and via its own streaming platform.Technical Indicators RSI are at “hold” and/or the Technical Indicators SMA are at “hold” too, like the social media sentiment “hold” also.
What basically makes me feel positive about the Adidas share, because the worst may already priced in and/or is may be already behind us! Or?

The Relative Strength Index (RSI), a technical analysis indicator, can be used to determine whether a security is “overbought” or “oversold”. To do this, the upward and downward movements of an underlying asset are compared over time. Let’s look at the RSI for the last 7 days for the Adidas stock: the value is currently 48.98. As a result, the security is neither overbought nor oversold, and we therefore assign a “hold” rating. The RSI of the last 25 trading days is less volatile than the RSI7 and adds a longer-term perspective to our analysis. As with the RSI7, Adidas is neither overbought nor oversold on this basis (value: 53.53). The security is therefore also classified as “Hold” for the RSI25. Overall, the analysis of the RSIs on Adidas provides a “hold” rating.

Based on the moving average price, the Adidas is currently a “Sell”. Because the GD200 of the value is EUR 145.24, which means that the share price (EUR 137.42) is -5.38 percent above this trend signal. This corresponds to the classification as “Sell”. Based on the past 50 days, the moving average price (GD50) is EUR 139.76. From the point of view of the share price itself, this in turn corresponds to a deviation of -1.67 percent. This makes the stock a “hold” stock during this period. Overall, this corresponds to the “Hold” rating.

The discussions about Adidas on social media platforms give a clear signal about the assessments and moods surrounding the title. {POS_NEG_NEU_DAYS_4}. In contrast, mostly positive topics related to value were addressed in the past few days. Our editorial team has come to the conclusion that the company should be classified as a “hold”. After all, nine trading signals can also be determined at this level in the past period. The picture gives 0 buy and 9 sell signals. This result ultimately leads to a classification as a “sell” share. In summary, the editorial team is therefore of the opinion that the Adidas share is appropriately rated “Hold” based on investor sentiment.