Amer Sports jumps as brokerages start coverage with eye on China demand

Anta Sports Products

26/02/2024 12:34

Feb 26 (Reuters) - Shares of Amer Sports  AS.N  rose
about 7% before the bell on Monday as brokerages started
coverage of the company's stock, with analysts focusing on
strong demand for its outdoor and sportswear products in China.
    The company, which makes Wilson tennis rackets, was bought
by China's Anta Sports  2020.HK  in 2019 and recently went
public again on Feb. 1 in a tepid debut.
    However, analysts believe Amer Sports' brands such as
Arc'teryx and Salomon could help drive sales globally as
consumers increasingly spend on running shoes and outdoor
clothing.
    Amer Sports had a market value of $7.77 billion, as of
Friday's close.
    At least six brokerages including TD Cowen and Bernstein on
Monday rated the stock "outperform". Evercore ISI assigned the
highest price target of $21 and said it expects Amer to benefit
from Anta's deep knowledge of the China market, helping it
compete with North American and European brands in the country.
    "I do believe that the Anta relation can assist them as they
are familiar with the market and could aid them in localizing,"
Jane Hali & Associates senior analyst Jessica Ramirez said.
    "I think Arc'teryx and Salomon are being well received by
the market in China. Both brands have been catering to the
region with unique in-store experiences, products and
campaigns."
    Bernstein analysts expect China to continue to deliver high
revenue growth for Amer Sports, with a compound annual growth
rate of 26% between 2023 and 2028.
    In 2023, the company's revenue from China rose about 68% to
$593 million for the nine months ended Sept. 30.
    Analysts also expect Amer Sports to gain market share in the
United States, with consumers in the country looking to upgrade
their camping gear and sports equipment following the pandemic.

 (Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by
Shounak Dasgupta)
 ((AnanyaMariam.Rajesh@thomsonreuters.com; Twitter: https://twitter.com/AnanyaMariam))