Morgan Stanley on Monday upgraded its recommendation on adidas shares from 'Underweight' to 'Overweight', with a price target raised from €175 to €235.

In a research note, the analyst praises the positive reception given to the group's latest collections, as well as the expansion of the range surrounding models that had previously sold well, such as the SL72 sneakers.

Morgan says he expects the improved performance to continue with the recent partnership with Anthony Edwards in basketball and the prospect of the upcoming Euro 2024 soccer tournament.

The professional adds that adidas could also benefit from the recent weakness at Nike, where the pace of innovation has slowed, as well as from its more pragmatic approach to pricing.

The analyst thus expects an inflection point in sales in the second half of the year, leading him to revise upwards his sales forecasts for 2024, 2025 and 2026.

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