Berenberg favours Puma among sporting goods makers as tariffs loom

Li Ning

15/04/2025 09:14

** Berenberg expects tariffs to affect sporting goods makers, noting the U.S. accounts for 38% of the industry's global revenues, with South-East Asia providing 95% of supply
** Berenberg estimates a 10% downside in real U.S. revenues due to tariffs, and a 5-8% hit to EBIT margins, expecting prices of sport footwear and apparel to rise 8-17%

** This, after three decades of flat foot wear prices, will be a shock to customers, it says

** Berenberg notes that China, which represents 14% of the global sporting goods market, may increase given collapsing consumer confidence in the U.S.

**However, China's rising "patriotic consumption" benefits local brands like ANTA 2020.HK and Li Ning 2331.HK, is says

** Berenberg says Puma is its sector-favourite in this environment, and initiates the German manufacturer with a "buy" rating

** The broker notes Puma's EV/sales ratio at a 20 year low, but says the valuation ignores the company's positioning across performance sports and strong balance sheet

** Puma shares rise 2.9%, outperforming the German midcap index .MDAXI, which stands at 0.8%

** Berenberg rates Adidas and Nike NKE.N at "hold", citing a saturated valuation and past "strategic errors," respectively

 (Reporting by Maria Rugamer)

 ((Maria.Rugamer@thomsonreuters.com))