Research on the Valuation of Adidas based on P/E Method

Abstract

The value of a company is a topic that deserves to be studied in depth. Company value is receiving increasing attention and the methods used to assess the value of a company are particularly important. This paper begins with a theoretical discussion of the role of P/E valuation methods in assessing the value of a company. The paper studies the current economic situation of Adidas in the Chinese market in recent years and also compares Adidas' P/E ratio with that of the financial market through the method of data analysis. The study of the P/E ratio provides an understanding of whether a stock is overvalued or undervalued relative to the market. The meaning of the P/E ratio is that the price of a stock is related to its intrinsic value and fluctuates around its intrinsic price in a small range. The study finds that Adidas' P/E ratio for the past year was undervalued relative to the overall market average. The significance of the research on company value assessment is that it can give investors an intuitive picture of the rate of return on the price of a stock and can enable them to make better choices. The main object of this paper is the data performance of Adidas in 2021.