TD Cowen reaffirms Buy rating on Amer Sports stock

TD Cowen reiterated a Buy rating with a $41 price target for Amer Sports (AS), citing CFO Andrew Page's confidence in the company's growth trajectory at the Future of the Consumer Conference. The firm projects a 33% compound annual growth rate in EPS through fiscal year 2028, justifying high valuation multiples based on the company's global expansion and strong brand performance, including Arc'teryx and Salomon. This positive outlook aligns with Amer Sports' recent strong Q1 results, featuring a 26% sales increase and EPS that nearly doubled expectations, leading to upward revisions in full-year 2025 EPS guidance, although TD Cowen's projections remain more optimistic than the company's.

Analysis

TD Cowen has reiterated a Buy rating and maintained a $41.00 price target for Amer Sports Inc. (NYSE: AS), reflecting confidence expressed by CFO Andrew Page regarding the company's growth trajectory. This optimism is underpinned by Amer Sports' global expansion strategy and the robust performance of key brands such as Arc’teryx, Salomon, and Wilson Tennis 360. The company's recent financial data supports this view, with reported revenue growth of 20.27% and a healthy gross profit margin of 56.28%. Despite trading at a high P/E ratio of 101x and near its 52-week high of $38.51, TD Cowen justifies its target with a valuation of 39 times estimated FY26 earnings per share and 26.5 times adjusted EBITDA, projecting a significant 33% compound annual growth rate (CAGR) in EPS through fiscal year 2028. Amer Sports' first-quarter results further bolstered this positive outlook, with sales reaching $1.473 billion (a 26% increase ex-FX) and EPS of $0.27 nearly doubling expectations, prompting an upward revision of its full-year 2025 EPS guidance. Notably, TD Cowen's projections remain more bullish than the company’s updated guidance. Other analysts share this positive sentiment: UBS raised its price target to $50, anticipating a 30% EPS CAGR over five years; Baird increased its target to $44, citing strong Q1 performance and growth in direct-to-consumer and China segments; and Bernstein reiterated an Outperform rating. A secondary offering of 35 million shares by FountainVest Partners, with Amer Sports not receiving any proceeds, has also been announced.

Key Decisions for Investors

• Investors should acknowledge the strong growth narrative and bullish analyst consensus for Amer Sports, driven by its robust brand portfolio and global expansion initiatives.
• The high P/E ratio of 101x and forward valuation multiples warrant careful consideration, suggesting that significant future growth is already priced into the stock, thus requiring diligent monitoring of execution against ambitious targets.
• Attention should be paid to the company's ability to sustain its high revenue growth and EPS trajectory, especially in bridging the gap between its own guidance and the more optimistic forecasts from analysts like TD Cowen.
• The secondary offering by FountainVest Partners may introduce short-term share price volatility due to increased supply, though it does not impact Amer Sports' underlying financial position or dilute existing shareholders as the company is not issuing new shares or receiving proceeds.