Adidas Stock: Mixed Signals as Ratings Rise, Probe Hits

Adidas's financial landscape presents a complex picture as Moody's Investor Service maintains its strong A3 long-term and Prime-2 short-term ratings for the sportswear giant, while upgrading its outlook from negative to stable. This positive assessment stems from the company's continued performance improvements through September 2024, with Moody's forecasting further stabilization of financial metrics over the next twelve to eighteen months. The rating agency's confidence reflects Adidas's resilience following the challenges faced in 2023, with market response initially showing optimism as shares climbed 0.80 percent to €239.50.

Legal Investigation Impact

However, recent regulatory investigations at the company's Herzogenaurach headquarters have cast a shadow over the positive ratings news. The probe, focusing on customs and tax matters spanning from October 2019 to August 2024, has triggered market uncertainty, leading to a notable three percent decline in after-hours trading. This development has temporarily overshadowed the otherwise encouraging trajectory of the company's financial health.