Berenberg favours Puma among sporting goods makers as tariffs loom

Berenberg expects tariffs to affect sporting goods makers, noting the U.S. accounts for 38% of the industry's global revenues, with South-East Asia providing 95% of supply
Berenberg estimates a 10% downside in real U.S. revenues due to tariffs, and a 5-8% hit to EBIT margins, expecting prices of sport footwear and apparel to rise 8-17%

This, after three decades of flat foot wear prices, will be a shock to customers, it says

Berenberg notes that China, which represents 14% of the global sporting goods market, may increase given collapsing consumer confidence in the U.S.

However, China's rising "patriotic consumption" benefits local brands like ANTA 2020.HK and Li Ning 2331.HK, is says

Berenberg says Puma is its sector-favourite in this environment, and initiates the German manufacturer with a "buy" rating

The broker notes Puma's EV/sales ratio at a 20 year low, but says the valuation ignores the company's positioning across performance sports and strong balance sheet

Puma shares rise 2.9%, outperforming the German midcap index .MDAXI, which stands at 0.8%

Berenberg rates Adidas and Nike NKE.N at "hold", citing a saturated valuation and past "strategic errors," respectively