Adidas (XTRA:ADS): Evaluating Valuation as Major World Cup Campaigns Boost Brand Visibility

Adidas (XTRA:ADS) is ramping up its marketing activity for the 2026 FIFA World Cup, rolling out striking campaigns and new kit launches with football stars like Lionel Messi and Lamine Yamal. These initiatives are boosting the brand's visibility as anticipation for the tournament grows.

See our latest analysis for adidas.

Adidas has kept the spotlight on itself with a cinematic World Cup ad and buzzy new sneaker launches, but recent momentum hasn’t been enough to offset a rocky year. After a sharp slide in the last month, adidas shares have fallen over 31% year-to-date, while the 1-year total shareholder return sits at -24.7%. However, looking back three years, the total return is still up 24.9%, which signals long-term investors have seen gains despite a challenging stretch. As excitement builds for the World Cup and new campaigns, investors are watching closely to see if this renewed energy will help re-invigorate adidas’s stock performance.

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Yet with shares trading far below their analyst price targets and new World Cup momentum building, the real question for investors is whether adidas is currently undervalued or if the market has already accounted for future growth prospects.

Most Popular Narrative: 30.7% Undervalued

adidas’s most widely-followed narrative assigns a fair value significantly above the recent share price. This suggests growth optimism outweighs current market caution. With the last close at €162.3 and the narrative fair value set at €234.05, expectations for future earnings strength are at the forefront.

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. This positions the company for sustained volume expansion and recurring sales growth (impacts revenue and earnings).

Read the complete narrative.

Want insight into how this premium is justified? This narrative builds its case around expansion in high-growth categories and margin gains that rival market leaders. Wonder what financial leaps are needed to support such a jump in valuation? Explore the full forecast for the bold assumptions behind this fair value.

Result: Fair Value of €234.05 (UNDERVALUED)

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

However, rising tariffs and intensifying competition in key markets could quickly undermine adidas’s growth and margin recovery prospects, which may temper investor optimism.

Find out about the key risks to this adidas narrative.

Another View: How Do Market Multiples Stack Up?

While narrative and analyst forecasts paint adidas as undervalued, the market’s actual price-to-earnings ratio tells a more complicated story. Shares are trading at 23.9 times earnings, which is higher than both the European Luxury industry average of 21 and the estimated fair ratio of 21.6. This premium could mean investors are betting on a notable rebound. It also raises questions about valuation risk if those rebound hopes do not materialize.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own adidas Narrative

Prefer to dig into the numbers and form your own perspective? You can easily shape your own adidas story and analysis in just a few minutes. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding adidas.

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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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