Visibility low, downgrade to Neutral After Puma''s profit warning in January, we argued in Catastrophe or speedbump? that its trough valuation multiple still offered upside opportunities. However, following management''s profit guidance which sits below consensus due to worsening sales trends and currencies, we now see less scope for a near-term re-rating. We are concerned that profits may decline for several quarters, and, with visibility this low, we downgrade to Neutral. What happened? A sharp slowdown in sales growth in Q1, caused by consumer weakness in the US and China, has led wholesale partners to rephase product deliveries, materially impacting Puma''s profits. The company expects Q1 sales to decline and for profits to more than halve year-on-year. We detailed this in 2025 guidance: dead cat trounced. The progression of profits this year depends on delivering cost savings, which are likely to be weighted towards the second-half. Phasing uncertainties Given the sudden slowdown in sales in February, it is difficult to have strong conviction that sales will recover as early as Q2, although the timing of Easter should help, and management remains confident about its wholesale order book later in the year. The timing of the cost saving delivery is also uncertain. Management has already guided Q1 Adj. EBIT to fall to EUR 70m (1Q24 EUR 159m) and we think it reasonably likely that profits again decline year-on-year in Q2. Cutting 2025 estimates by a further c.30%, TP to EUR 25 Management''s 2025 Adjusted EBIT guidance range is EUR 520-600m. We cut to below the mid-point, EUR 548m. This relies on second-half profits increasing year-on-year, aided by cost efficiency. In this period of uncertainty the investment case relies on valuation rather than any obvious catalyst. Our lowered price target implies 2025 P/E of 15x, which seems reasonable. Neutral.