Bernstein initiated coverage on five major apparel stocks on Wednesday, assigning Outperform ratings to Adidas, Nike and On Holding, while maintaining Market-Perform views on Deckers Outdoor and Lululemon.
Adidas received an Outperform rating with a price target of €245 for its ADS.GR listing and $132.50 for its ADDYY ADR, reflecting expectations of a 7% compound annual growth rate in U.S. sales through 2030. Bernstein cited momentum in lifestyle products, running footwear and wholesale distribution improvements as key drivers behind an anticipated rise in U.S. market share from 3.5% to 4.3%. The firm noted Adidas reported record quarterly sales in Q2 2026 despite missing earnings per share estimates, and highlighted an upgrade to Outperform by RBC Capital based on direct-to-consumer revenue growth.
Nike was also rated Outperform with a $68 price target, with Bernstein projecting 3%–4% U.S. gross merchandise value growth through 2030. The outlook assumes recovery supported by product innovation and expanded wholesale distribution across sporting goods, outdoor and running specialty retailers. Potential upside could materialize if the Jordan brand regains momentum following the 2027–28 innovation pipeline. The rating contrasts with JPMorgan’s recent downgrade to Underweight, which cited concerns over the financial impact of strategic decisions. Nike also faces leadership transition with its chief accounting officer set to resign on September 4, 2026.
On Holding received an Outperform rating and a $62 price target, with Bernstein forecasting a 12% sales CAGR through 2030 and a U.S. market share increase from 1.5% to 2.3%. Global sales are expected to expand at a high-teens to low-20% pace, driven by growth in China and Asia. The firm described On Holding as having the longest growth runway among major brands due to lower market penetration, brand awareness initiatives and cross-category expansion. The company is reducing wholesale channel sell-in in Q2 and Q3 2026 to manage inventory amid a market slowdown, and price targets were lowered by UBS and Telsey following Q2 results.
Deckers Outdoor was assigned a Market-Perform rating with a $105 price target, with upside tied to potential recovery in Hoka’s U.S. demand—assuming pricing can offset tariff pressures—and continued growth for Ugg above the casual footwear market. Risks include innovation and competitive challenges for Hoka and Ugg, cost inflation and margin pressures. The company reported Q1 revenue of $1.02 billion, beating consensus, but issued a softer-than-expected Q2 outlook, prompting price target reductions from Stifel and Truist Securities.
Lululemon received a Market-Perform rating with a $145 price target, with Bernstein projecting broadly flat U.S. sales through 2030 and a decline in U.S. market share from 3.3% to 2.8%. The firm cited product challenges and intensifying competition from premium brands such as Alo and Vuori as key headwinds. Leadership transition is underway with Heidi O’Neill set to become CEO on September 8. KeyBanc flagged soft U.S. sales trends, and UBS lowered its price target amid expectations of a potential reduction to fiscal 2026 earnings guidance.
