Adidas'' Gulden ticket? Having turned around Puma, Bjørn Gulden now crosses the city to take up the CEO role at Adidas next year. We revisit the early days of the Puma recovery to look for indications of what could happen next. We also revisit the numbers, cutting EPS substantially for both following a bruising Q3. Adidas'' chances of a successful turnaround are now far higher, in our view, but it''s going to take time. We maintain our Neutral Adidas rating, viewing Puma''s valuation and momentum as more attractive. Becoming the hero of Herzo: match tactics Bjørn Gulden has turned around the Puma brand over the past 9 years. He now crosses the city of Herzogenaurach to take up the role of CEO at rival Adidas, returning to where he worked in the 1990s: if he also turns around Adidas then he would achieve legendary status in the industry. While filling the void of losing the Yeezy agreement is key in the near-term, how much he can fire up brand heat and how Adidas navigates the Chinese market are the things that will determine the ball game. Vital statistics: what the numbers suggest 2023 is likely to be a year of strengthening the foundations at Adidas: clearing through excess inventory, mitigating costs, driving its reset strategies in basketball and China, and filling the gap left by Yeezy. It doesn''t seem likely to be a year when the company posts great numbers. We forecast Adidas 2023 net income of EUR c.810m, or an EBIT margin of 4.8%. On the other side of Herzo we expect Puma to achieve 2023 EBIT of EUR c.670m at the higher EBIT margin of 7.2%. End game: valuation and stock view Adidas shares have rightly rallied on the appointment of Bjørn Gulden as CEO: a quick (1 Jan) and smooth transition to a proven executive. From here we expect slower progress from the stock: our new Adidas target price of EUR150 already bakes in a return to 12% margins. We model a long- term margin of 10% for Puma, implying a target price of EUR65 and more...