Winners Keep Winning - Buy ADS & ON

Research evidence excerpt

Winners Keep Winning - Buy ADS & ON

Olivia Petronilho - Specialist Sales - European Consumer AC (44-20) 3493-3709 Europe Specialist Sales J P M O R G A Nolivia.b.petronilho@jpmorgan.com

J.P. Morgan Securities plc 02 July 2026

Olivia Petronilho

+44 207 134 2676

olivia.b.petronilho@jpmorgan.com

Wendy is back and reinstated coverage on the Sporting Goods names this morning. The “”jist”? She thinks market share

winners will keep winning. So this means we go long adidas and On. Puma is now a Neutral (prior UW) with downside

protected ST post M&A developments but no signs of a turnaround materialising just yet. JD Sports also a Neutral with

no visibility on earnings growth near term.

Her note this morning assesses the growth outlook, execution risk and risk/return asymmetry for the space. While the macro

remains dynamic and competition remains intense, Wendy expects a slower Nike comeback to extend the window for current

market share winners to keep winning and the solid momentum at adidas (+14% topline growth, +16% EBIT growth in Q1)

and On (+26% topline growth, +45% adjusted EBITDA growth) to continue. She argues risk/ return asymmetry for both adidas

and On is more attractive today following the sell-off over the last 12m (adidas -13%, On -32%), with 14x and 16x 2Y forward P/

E on concerns about whether these companies are “nearing the end of their high growth phase”. She expects a consistent delivery

of earnings growth over the coming quarters to support an upward re-rating of both companies. On the other hand, execution risk

in the turnaround at Puma and JD Sports remain, but she notes bars have been reset to lower levels, which should provide

downside protection.

Full note is here, and should make for an amazing weekend read if you have not yet gone through it.