European Sporting Goods: Keep delivering - Reinstate On as OW and Place on Positive Catalyst Watch, adidas as OW, JD as N, and Puma to N

Research evidence excerpt

European Sporting Goods: Keep delivering - Reinstate On as OW and Place on Positive Catalyst Watch, adidas as OW, JD as N, and Puma to N

nside protection. We resume our rating for On as OW and place it on

Positive Catalyst Watch, as we see potential for above-consensus Q2 delivery Catalyst Watch is our short-term conviction indicator for our

(JPMe Q2 adj. EBITDA 9% above BBG consensus) and additional guidance coverageanalysts canuniverse.apply toIt isa stockan optionalin theirindicatorcoverageourintoresearcha specific

increases; we resume our rating for adidas as OW and JD Sports as Neutral; we event in order to articulate short-term positivity or caution

move Puma to Neutral from our Underweight rating in November 2025. based on near-term fundamentals. As such, it can differ from the analysts’ published ratings, which are sector relative and

longer term in nature.

“Consistent-Delivery” vs“Reset & Rebuild”: In our coverage universe, we note

an increasingly obvious divide between two camps: 1) The “Consistent-delivery

” camp, adidas and On, which have consistently delivered strong results quarter

over quarter, but whose valuation multiples have come down on concerns about

whether these companies are “nearing the end of their high growth phase”. Hence,

investors demand additional quarters of beat and raise to be convinced; and 2) the

“Reset & Rebuild” camp, Puma and JD Sports, for whom the earnings bar is lower

following company reset initiatives. On the other hand, valuation multiples have

positively re-rated in recent months as investors regain confidence in the potential

for shareholder returns.

Why is now the time for the “Consistent -Delivery” camp to shine?: Over the

last 12 months, the “Consistent -Delivery” camp has underperformed the “Reset

& Rebuild” camp.