Adidas Stock Plummets After Downgrade Amid Growing Competition

Adidas shares experienced a significant drop on Tuesday following a downgrade from Bank of America Corp., which issued a rare “sell” rating for the German sportswear giant. The stock fell as much as 7.6% in response to the abrupt double downgrade, signaling increased investor concern about the company’s future performance.

Analysts at Bank of America, led by Thierry Cota, anticipate a slowdown in Adidas’s sales growth, forecasting a return to single-digit figures this year. This pessimistic outlook stems from growing competitive pressures, particularly the resurgence of Nike Inc. and the rising popularity of alternative brands like On, Asics, and Puma, which are expected to capture a larger share of the market. The bank consequently shifted its rating from “buy” to “underperform.”

Despite this downgrade, a substantial majority of analysts remain optimistic about Adidas, with approximately 84% tracked by Bloomberg still maintaining “buy” or equivalent ratings. However, this optimism exists despite the stock already having lost nearly 30% of its value in 2025, largely due to the negative impact of currency fluctuations on earnings.

While Bank of America acknowledges the potential short-term boost from the 2026 FIFA World Cup, they predict that growth will likely decelerate after the event. The analysts cautioned against broader sector enthusiasm, also downgrading JD Sports Fashion Plc, and suggested that the two-decade-long trend towards casual wear is nearing its end. They questioned the sustainability of growth following the World Cup-related surge.

The bank has lowered its price target for Adidas to 160 euros, the lowest estimate currently among analysts, representing a potential 6% decrease from the previous day’s closing price. As of 11:08 a.m. in Frankfurt, the stock was trading at 158.60 euros, reflecting the immediate impact of the downgrade and the shifting sentiment towards the company’s prospects. The analysts believe companies demonstrating sustained, strong growth, such as On and Asics, will be favored as investor interest in the sporting goods sector wanes.