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Sneaker Stocks: Should You Buy Adidas (ADDYY) or Nike (NKE)?

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Sometimes in life you just have to pick a side. Are you a Pepsi or Coke drinker? Do you cheer for the Yankees or the Red Sox? Do you eat your bagels with butter or cream cheese?

You see, these are hotly contested rivalries. You can’t really jump from one side to the other. Another one of these rivalries deals with the shoes you choose to wear. While there are countless brands you can put on your feet, everyone knows about the rivalry between Adidas (ADDYY - Free Report) and Nike (NKE - Free Report) .

At some point in your life, you’ve probably worn a pair of sneakers from one of these two companies, if not both. You might not think you have a preference between the two, but admit it—you do. You certainly wouldn’t dare to wear Adidas socks with Nike shoes, that’s for sure.

With that said, the Adidas and Nike rivalry translates to the stock market as well. When we take a look at sneaker-based stocks, it always feels like either one of these brands is leading the way, and that’s definitely the case right now.

Leader of the Sneaker Stocks

As of right now, Adidas is on top and Nike is struggling. Adidas currently has a Zacks Rank #1 (Strong Buy), thanks to its impressive earnings related data. In the most recent quarter, Adidas posted earnings of 82 cents per share, which smashed the Zacks Consensus Estimate of 43 cents per share.

As a result, analysts have been busy revising Adidas’ estimates upwards. In the past 60 days, the Zacks Consensus Estimate for the German shoemaker’s current-quarter earnings has gained three cents. We now expect Adidas to see earnings of $1.01 per share this quarter, which would represent growth of 9.78% on a year-over-year basis.

Shares of ADDYY are up nearly 70% on the year.

On the other hand, Nike has seen a lot of negative earnings estimate revision activity as a result of its recent performance. In the past 60 days, we have seen nine negative revisions for its current-quarter earnings, and the Zacks Consensus Estimate has lost 15 cents. The current Zacks Consensus Estimate of $0.55 per share would represent a decline of over 17% year-over-year.

Shares of NKE are down over 12% on the year.

Interestingly enough, Nike recently decided to follow in the footsteps of Adidas by significantly reducing the size of its golf segment. The company will no longer be manufacturing golf clubs, balls, and bags and instead will focus solely on footwear.

Bottom Line

With the Rio Olympics in full swing, sports are certainly on everyone’s minds. For right now, Adidas is taking home the gold—at least in the sneaker stock race.  

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