Investing.com -- Amer Sports Inc (NYSE: AS) shares rose around 3% in Tuesday trading after Jefferies initiated coverage on the apparel and equipment group with a Buy rating and a $42 price target, pointing to expanding momentum across core brands like Salomon and Arc’teryx.

The brokerage highlighted that Amer Sports possesses a portfolio of premium outdoor brands with long, visible runways for expansion anchored in consumer authenticity. "Multiple growth engines with valuation most attractive since IPO," Jefferies analyst Randal Konik wrote in a note to clients, adding that the stock’s current multiple reflects an industry-wide de-rating rather than company-specific operational friction.

Wall Street’s focus centers on Salomon emerging as a powerful second growth pillar alongside Arc’teryx. Konik expects Salomon sales to top $2.5 billion in 2026, a 30% increase, and reach its $3 billion target ahead of 2028 before potentially expanding toward $5 billion by 2031.

Crucially, brand momentum relies on broad product adoption rather than a single hit item. The flagship XT-6 model accounts for only 15% of brand sales, Konik noted, while the XT-Whisper sales grew from zero to nearly 1 million pairs in 18 months, with roughly 80% of Sportstyle purchasers representing new customers to the brand.

Concurrently, the analyst posited that the growth profile for Arc’teryx is shifting toward Western markets as Chinese market expansion naturally moderates. Arc’teryx currently holds 10.4% of China's outdoor segment compared to just 4.2% in the Americas and 1.1% in EMEA, opening vast runway for physical store footprint additions and digital engagement.

Financial metrics reinforce the operational thesis, with gross margins rising from 53% in 2023 toward an estimated 61% in 2026, driven by higher-margin footwear and Sportstyle mix headwinds turning into tailwinds. Jefferies projects earnings per share growth of 22% in 2027E, backed by a track record of beatable management targets that has seen Amer Sports top sales estimates in each of its last 11 quarters.

"AS trades at ~17x FY2 P/E, near the bottom of its 17x to 46x range and well below its ~28x avg," Konik noted, attributing the compressed valuation to broader sector weakness and a 31% public float overhang. The firm's $42 price target applies a 25x multiple to FY27E EPS estimates of $1.67, balancing secular brand strength against near-term macro and weather risks.

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