Core Insights - The Zacks Leisure and Recreation Products industry is experiencing growth due to increased health and fitness awareness, leading to solid demand for fitness products and outdoor recreation items [1][5]. Industry Overview - The industry includes companies that provide a range of recreational products and services, such as amusement products, swimming pools, marine products, and outdoor equipment. Economic growth, a healthy labor market, and rising disposable income drive consumer demand [2]. Trends Influencing the Industry - The U.S. golf business is in a growth cycle, with increased participation and engagement across various age groups. Off-course experiences are attracting younger consumers, broadening the sport's appeal [3]. - Higher play frequency among golfers is leading to increased demand for upgraded equipment, while innovations in fitting and data analytics are enhancing spending per participant [4]. - There is robust demand for fitness-related products, with consumers investing in home workout equipment and digital fitness platforms, driven by a focus on personal well-being [5]. - Technology is redefining engagement in the industry, with smart fitness equipment and app-enabled products enhancing customer experiences and extending lifetime value [6]. Industry Performance - The Zacks Leisure and Recreation Products industry holds a Zacks Industry Rank of 110, placing it in the top 45% of over 244 Zacks industries, indicating positive near-term prospects [7][8]. - Despite the positive outlook, the industry has underperformed the S&P 500, with a collective decline of 2.2% over the past year compared to the S&P 500's rise of 18.3% [10]. Valuation Metrics - The industry trades at a forward price-to-earnings ratio of 21.4X, which is lower than the S&P 500's 23.11X and the sector's 18.45X. The industry has seen a range from 13.25X to 37.40X over the past five years, with a median of 20.67X [13]. Notable Companies - **Topgolf Callaway**: The company has seen a resurgence in traffic and sales, particularly in its core customer segment, with a Zacks Rank of 1 (Strong Buy) [14]. The stock has increased by 48.9% in the past six months [15]. - **Amer Sports**: Benefiting from strong demand for premium brands, particularly in footwear, with a Zacks Rank of 2 (Buy). The company expects a 22% year-over-year growth in earnings per share [19][20]. - **Acushnet Holdings**: Strong global golf participation and demand for Titleist products are driving growth, with a projected 7.1% increase in earnings for 2026 [23][24]. - **Pool Corporation**: Expected to benefit from steady maintenance demand and digital enhancements, with a forecasted 6.6% increase in earnings for 2026 [27][28].

Company Performance - Amer Sports continues to perform well in a volatile stock market, securing a position on the Investor's Business Daily Leaderboard and remaining in buy range past its latest entry point [4] - The stock has a B+ IBD Accumulation/Distribution Rating and a 1.5 up/down volume ratio, indicating strong buying interest [4] - Amer Sports sees its RS Rating rise to 81, reflecting improved relative strength [9] Market Trends - The Dow Jones and S&P 500 are at record highs, indicating a broadening uptrend in the market [9] - Amer Sports, along with other companies like ATI and Amphenol, is in focus as the market pauses ahead of Federal Reserve announcements [9]

Economic Outlook - The Federal Reserve cut interest rates by a quarter percentage point in December but indicated only one rate cut is expected in 2026 due to persistent high inflation [2][7] - A softer inflation reading for November has raised hopes for more rate cuts, with expectations that inflation could decline to 2.4% by the end of 2026 and economic growth could accelerate to 2.3% next year [8] Consumer Discretionary Stocks - Five consumer discretionary stocks are recommended: Amer Sports, Inc. (AS), Crocs, Inc. (CROX), Kontoor Brands, Inc. (KTB), Ralph Lauren Corporation (RL), and Roku, Inc. (ROKU) [3] - These stocks have seen positive earnings estimate revisions in the past 60 days and carry a Zacks Rank 2 (Buy), indicating potential for solid returns [4] Company-Specific Insights - **Amer Sports, Inc. (AS)**: Expected earnings growth rate for next year is 21.5%, with current-year earnings estimates improving by 10.7% over the last 60 days [9][11] - **Crocs, Inc. (CROX)**: Expected earnings growth rate for next year is 3.9%, with current-year earnings estimates improving by 5% over the past 60 days [12] - **Kontoor Brands, Inc. (KTB)**: Expected earnings growth rate for next year is 5.3%, with current-year earnings estimates improving by 0.7% over the past 60 days [13] - **Ralph Lauren Corporation (RL)**: Expected earnings growth rate for next year is 9.1%, with current-year earnings estimates improving by 0.7% over the past 60 days [14] - **Roku, Inc. (ROKU)**: Expected earnings growth rate for the current year is over 100%, with current-year earnings estimates improving by 83.3% over the past 60 days [15]

Core Insights - The article emphasizes the importance of timing and sustainability in short-term investing, highlighting that successful entries into trends are crucial for profitability [1][2]. Group 1: Stock Performance - Amer Sports, Inc. (AS) has shown a solid price increase of 11.4% over the past 12 weeks, indicating strong investor interest [4]. - The stock has also increased by 11.2% in the last four weeks, suggesting that the upward trend is still intact [5]. - AS is currently trading at 81.1% of its 52-week high-low range, indicating a potential breakout opportunity [5]. Group 2: Fundamental Strength - AS holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like AS that have the fundamental strength to maintain their upward momentum [3]. - The article suggests that there are several other stocks passing through this screen, providing additional investment opportunities [8].

Group 1 - The Dow Jones Industrial Average and other stock indexes experienced a decline, with JPMorgan Chase, Amer Sports, Carpenter Technology, and Urban Outfitters identified as notable stocks to watch in the current market [4] - Key indexes are near all-time highs, prompting investors to look for new breakout opportunities using The IBD Methodology [4] - Eli Lilly and Urban Outfitters are highlighted as leading stocks in a divided market, with Urban Outfitters reaching new highs [7][8] Group 2 - Analysts are recommending 11 S&P 500 stocks for 2026, indicating a positive outlook for certain sectors [6] - Amer Sports is noted as the IPO Stock of the Week, following a strong breakout and entering a buy zone [7] - The market is currently focusing on stocks like Eli Lilly and Urban Outfitters, as well as a gold miner ETF, amidst broader market fluctuations [8]

Core Insights - Amer Sports Inc. is highlighted as a promising investment opportunity, with UBS raising its price target to $54 from $52 while maintaining a Buy rating due to strong growth prospects, particularly for brands like Arc'teryx and Salomon [1] - The company reported a significant revenue increase of 30% year-over-year in Q3 2025, totaling $1.76 billion, which exceeded market expectations [2][3] - Amer Sports' adjusted net income rose to $185 million, a substantial increase from $71 million in the previous year, leading to an adjusted diluted EPS of $0.33, up from $0.14 [3] Financial Performance - Q3 2025 revenue reached $1.76 billion, surpassing expectations by $29.35 million [2] - Adjusted gross margin improved by 2.4% to 57.9%, while adjusted operating margin expanded by 1.3% to 15.7% [2] - Direct-to-Consumer (DTC) sales surged by 51%, particularly driven by the Salomon brand in Greater China and the APAC region [3] Brand and Segment Performance - Technical Apparel revenue, led by Arc'teryx, increased by 31% to $683 million [3] - The growth was broad-based across various segments and geographies, indicating strong overall performance [3] Company Overview - Amer Sports Inc. designs, manufactures, markets, distributes, and sells sports equipment, apparel, footwear, and accessories globally, operating through three segments: Technical Apparel, Outdoor Performance, and Ball & Racquet Sports [4]

Core Viewpoint - The previous investment stance on Amer Sports was a hold rating due to concerns over risks related to the Tibet backlash in China, insider selling trends, and a focus on long-term investments while also considering short-term opportunities for alpha generation [1] Group 1: Investment Strategy - The investment approach is centered on bottom-up analysis, focusing on the fundamental strengths and weaknesses of individual companies [1] - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Revenue Growth - Total revenue increased by 30% year-on-year to $1.756 billion[7] - Revenue growth in Greater China reached 47%, while Asia-Pacific saw a 54% increase[7] - Functional apparel revenue grew by 31% to $683 million, and outdoor sports revenue increased by 36% to $724 million[7] Store Expansion - Total store count increased by 85 to 631, with a year-on-year increase of 178 stores[7] - Same-store sales growth for functional apparel improved from 15% to 27%[5] Profitability Metrics - Gross margin improved by 1.6 percentage points to 56.8%[7] - Operating profit margin was reported at 12.3%, with an adjusted operating profit margin of 15.7%[7] Strategic Outlook - The company expects full-year revenue growth of 23-24% and a gross margin of 58.0%[8] - Projected earnings per share for 2025 is between $0.88 and $0.92[8] Valuation and Rating - Target price set at $43.80, representing a 20% upside from the current stock price of $36.60[9] - The stock is rated as "Buy" based on a 27x price-to-earnings ratio[9] Risks - Increased competition in the mature outdoor market in Europe and the U.S. poses a risk to performance[10] - High dependency on single brands and markets could impact stability[10]

Core Viewpoint - Amer Sports, Inc. (AS) has seen a 7.2% increase in share price over the past four weeks, closing at $34.06, with analysts suggesting a potential upside to a mean price target of $46.19, indicating a 35.6% increase from the current price [1] Price Targets and Analyst Consensus - The average of 15 short-term price targets ranges from a low of $39.80 to a high of $54.00, with a standard deviation of $4.11, suggesting a potential increase of 16.9% to 58.5% from the current price [2] - A low standard deviation indicates a strong agreement among analysts regarding the price targets, which can be a good starting point for further research [9] Earnings Estimates and Market Sentiment - Analysts show strong agreement in revising earnings per share (EPS) estimates higher, which correlates with potential stock price increases [11] - The Zacks Consensus Estimate for the current year has risen by 8.7% over the past month, with four estimates increasing and no negative revisions [12] - AS holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - Solely relying on price targets for investment decisions may not be wise, as empirical research indicates that they often mislead investors [7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of $45.2 based on a 49X PE for 2025 [10][11]. Core Insights - The company reported strong Q3 performance, with revenue of $1.76 billion, a 30% year-over-year increase, and net profit attributable to shareholders rising 156% to $140 million [11][12]. - All regions showed accelerated growth compared to Q2, with significant contributions from functional apparel, outdoor apparel, and ball sports segments [11][12][13]. Financial Summary - Projected total revenue for 2024A to 2027E is as follows: - 2024A: $5.183 billion - 2025E: $6.435 billion (up 24.1%) - 2026E: $7.530 billion (up 17.0%) - 2027E: $8.656 billion (up 15.0%) [3][6] - Projected net profit attributable to shareholders for 2025-2027 is: - 2025E: $511 million - 2026E: $650 million - 2027E: $818 million [10][11]. Segment Performance - **Functional Apparel**: Revenue grew 31% YoY, driven by strong performance in women's Arc'teryx and footwear. Direct-to-consumer (DTC) sales increased by 46% [12]. - **Outdoor Apparel**: Revenue increased by 36% YoY, primarily due to Salomon's strong performance. DTC sales rose by 67% YoY [13]. - **Ball Sports**: Revenue grew 16% YoY, with significant growth potential through partnerships with leading distributors [14]. Long-term Growth Outlook - The company has outlined a 5-year strategy targeting low to mid-double-digit revenue CAGR from 2025-2030, with expectations of improved operating margins across all segments [15].