Medium term outlook unchanged After market yesterday, Adidas guided 2024 EBIT of EUR 500m, less than half the level of consensus. We cut our 2024 forecasts materially, albeit not all the way down to this level. While the market''s reaction (-2% at close) looks generous, it demonstrates the confidence the market has in Adidas achieving its medium-term margin targets. On these goals, which we also continue to believe in, the stock continues to look attractive, in our view. Q4 23 beat, FY24 miss Q4 profits beat expectations despite the Argentina Peso devaluation hitting EBIT by EUR 100m, but this was the side show. The main news was management''s 2024 EBIT guidance of EUR 500m, far below consensus of EUR 1.2bn. A number of areas look conservatively guided, such as Yeezy and gross margins. Implied cost growth is also higher than we had modelled. We land at EUR 765m, a margin of c.3.5%, higher than guidance mainly due to Yeezy profitability. Medium-term 10% margins still the target Management reiterated its goal for 10% margins by 2026. Evidence in its favour includes a building order book with wholesale partners and a clear pipeline of new products. Moreover, management was clear about the opportunity to drive operational efficiencies and operating leverage. It appears to have chosen that in 2024 Adidas should focus on building the top-line momentum, however. We still forecast c.10% margins in 2026, albeit we lower our 2025 expectation from c.9.0% to c.7.5%. Instant replay, maintain Outperform Adidas'' market cap fell by EUR c.650m today. This is no more than the difference between yesterday''s 2024 consensus and management''s new guidance. This suggests the market hasn''t changed its assumptions for 2025 or beyond. Whilst this feels generous, and we shave off more from our valuation, our DCF-driven target price only falls from EUR 220 to EUR 210. Reiterate Outperform.