As the Adidas share price crashes, is it safe to buy the dip?

Adidas shares have plunged more than 40% from this year’s high to €153.90, eroding market cap from about €47bn to €27bn despite stronger-than-expected fundamentals — brand revenue hit a record €6.6bn in Q3, operating profit rose 23% to over €736m, year-to-date revenue is up 9% and management has raised FY EBIT guidance to ~€2bn. The stock screens cheaper than peers with a forward P/E of ~20 (vs. Nike 37) and has a potential catalyst in next year’s World Cup, but investors are fretting over tariffs, margin pressure and weakening North American sales. Technical indicators are bearish — below key support at €160 and the 61.8% retracement, with a death cross and momentum indicators suggesting further near-term downside toward €140 — implying the shares could represent a longer-term buying opportunity only if investors are willing to tolerate additional short-term weakness.

Analysis

Adidas shares have fallen over 41% from the year-to-date high to €153.90, shrinking market capitalization from about €47bn to €27bn despite strongly reported fundamentals: Brand adidas Q3 revenue hit a record €6.6bn, operating profit rose 23% to over €736m, year-to-date revenue increased 9%, and management raised FY EBIT guidance to roughly €2.0bn. Segment detail shows footwear revenue up 11% and apparel up 16% while accessories slipped 1% and North America weakened by 5%, indicating portfolio-level strength offset by regional softness. Market pricing appears to reflect macro and policy risks—investors are flagging potential tariff-driven cost pressure and margin erosion—yet valuation on a forward P/E of ~20 is below the S&P 500 (~23) and materially cheaper than Nike (37) and On (61), with the World Cup in June offering a near-term demand catalyst. Technical indicators are decisively bearish: price has broken key support at €160 and the 61.8% Fibonacci level (€156.80), a death cross has formed (50-/200-day EMA), the stock sits below the Ichimoku cloud and Supertrend, and momentum suggests further near-term downside toward ~€140 before any clear rebound to resistance near €200.

Key Decisions for Investors

• Consider phased, long-term accumulation only on material weakness toward the €140 support area given strong reported fundamentals and a forward P/E of ~20, monitor execution against raised ~€2bn EBIT guidance
• Avoid full-sized, immediate buys until technical stabilization is confirmed above €156–€160 and signs of North American revenue/margin recovery appear, as near-term downside is likely per the death cross and indicator set
• Use size control or hedges (e.g., puts or collars) if adding exposure to protect against tariff/margin risk and further sentiment-driven declines
• Track upcoming catalysts closely—management updates, Q4 trading, and World Cup order flow—and reassess relative value versus Nike and On for portfolio allocation