Jefferies initiates Amer Sports stock with buy on brand growth

Jefferies has taken a favorable view on Amer Sports Inc. (NYSE:AS), assigning the stock a Buy rating with a price target of $42.00. This implies substantial upside potential, given the current stock price of $28.37. According to InvestingPro data, the company's intrinsic value is estimated at $35.24, and the consensus among analysts remains bullish at 1.31. The firm highlights Amer Sports' diverse portfolio of premium brands, which possesses long growth prospects.

Jefferies anticipates that Salomon will emerge as a second growth engine within the next five years. Additionally, they expect Arc'teryx growth to shift from China to the West. Salomon is projected to achieve annual sales of over $2.5 billion by 2026, up approximately 30% from current levels, and reach its $3 billion target before 2028, accounting for roughly 30% of total Amer Sports sales.

The company's XT-6 line currently constitutes about 15% of Salomon's sales. However, the XT-Whisper, which went from zero to nearly 1 million pairs in just 18 months, has seen about 80% of its buyers new to the brand. Analysts are optimistic about North America's role as the fastest-growing region, with low-20s growth, and a 90% increase in U.S. web visits in August.

Despite significant investments in growth, Jefferies expects margins to stay robust, with earnings per share growing by 22% in 2027. The company's strong gross profit margin of 59.81% in the last twelve months bolsters this optimistic outlook. For a more in-depth look into Amer Sports' growth trajectory, investors can explore the Pro Research Report available for this and over 1,400 other US equities on InvestingPro.

Amer Sports has also been the focus of multiple analyst evaluations and updates. UBS has reiterated its Buy rating, raising the third-quarter 2026 revenue growth expectation to 20-22%, up from the previous 18-20% range. Truist Securities also maintains a Buy rating, projecting earnings per share of about $3.00 by 2031, with sales 30% higher and operating margins up 200 basis points from previous guidance.

Meanwhile, BMO Capital has maintained an Outperform rating and a $38.00 price target, considering Amer Sports a key topic in investor meetings in Paris and London. BTIG has also initiated coverage with a Buy rating and a $42.00 price target, citing the company's impressive brand growth potential and significant top-line growth. Lastly, Morgan Stanley has resumed coverage with an Equalweight rating, indicating that the growth and profitability profile is largely reflected in current market expectations. These developments demonstrate analysts' keen interest in Amer Sports' future performance.