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Puma shares added about 7% after the bank upgraded its recommendation on the stock to “Buy” and raised its target price to 35 euros from 27.5 euros. Investors are focused on the expected acquisition by China’s Anta Sports of a 29% stake in Puma. According to Citi, this could markedly accelerate the brand’s development in one of the world’s largest sportswear markets, Investing.com reported.
The bank’s analysts forecast that Puma’s revenue in China will grow at an average annual rate of 36% between 2026 and 2028. By comparison, after Anta’s entry into Amer Sports, the similar figure was around 18%.
A bet on China could significantly change the company’s business mix. According to Citi estimates, the share of the Chinese market in Puma’s total revenue will increase from about 7% to 11% by 2028. The company’s revenue forecast for the Asia-Pacific region for this period was 32% higher than current market expectations.
The optimism is not only due to sales growth. Citi expects a marked improvement in Puma’s profitability due to currency appreciation, development of direct-to-consumer sales and reduction of inventories accumulated in a difficult year for the company in 2025.
“Business growth in China and an increasing share of direct sales will be key drivers of margin expansion in the medium term,” the bank’s analysts said.
Citi expects Puma to be able to return to sustainable profit growth as early as 2027. The bank’s operating profit (EBIT) estimate for this year is 12% above average market expectations, and the gap widens to 36% for 2028.
However, the road to recovery is not so easy. Analysts warn of a possible rise in raw material costs due to higher oil prices, as well as the risk of higher transportation costs amid ongoing tensions in the Middle East.
In addition, Citi believes that Puma has so far failed to create a product hit comparable in popularity to Adidas’ Samba model. Despite the company’s efforts, demand for the Speedcat line remains relatively subdued.
