Stock of adidas has "been on a tear in recent weeks on
speculation" that the Frankfurt Stock Exchange planned to
include the company in the "prestigious" DAX Index of 30
stocks in September, according to Katja Frechen of the WALL
STREET JOURNAL. But Tuesday night, the exchange announced
that adidas "would have to wait at least another year."
Salomon Brothers analyst Ralf Conen, on the benefits of
being listed on the DAX: "As soon as a stock is part of the
DAX, its trading volume increases and it will eventually get
more attention." Analysts remain bullish on adidas as its
first-quarter backlog of orders rose 32% in Europe and 38%
in the U.S. But the "weakness in consumer spending within
Germany raises questions" with Salomon's Conen, who "urges"
investors to wait for an "expected rebound in German retail
sales." Analysts tell Frechen that adidas has "several
advantages" over Nike as many consumers "view it as a
fresher name" and sales are "more diversified and less
dependent on the U.S. market." By being "less dependent on
the whims of fashion," adidas also has an advantage over
European competitors (WALL STREET JOURNAL, 7/23).
