Adidas up after JPM puts it on positive catalyst watch, Puma slips on rating cut

Shares in Adidas ADSGn.DE are up around 3% after J.P.Morgan placed it on positive catalyst watch ahead of its Q3 results and Jefferies upgrade to "buy" from "hold"

Peer Puma PUMG.DE slips around 2% after JPM cut it to "underweight" from "neutral"

JPM says that in the context of a soft consumer demand it is important to find high quality companies that can deal with next wave of uncertainty and find next leg of growth

"We see a clear divide between market share winners who continue to win over consumers with a distinct value proposition, and market share losers who bear an outsized burden of soft consumer demand" - JPM

While it says that Adidas needs to find the next driver of earnings growth, it sees upcoming Q3 results as a catalyst for the shares to re-rate, citing more visibility on orderbook and if management reassures on the margin outlook

It keeps its "overweight" rating on Adidas

In contrast, it sees additional medium- to long-term risks of Puma losing its edge in an increasingly competitive sporting goods market, beyond near-term challenges