Rothschild Redburn downgrades Under Armour stock on delayed recovery

Investing.com - Rothschild Redburn downgraded Under Armour, Inc. (NYSE:UAA) from Buy to Neutral on Monday, while reducing its price target to $6.00 from $7.00. The stock, currently trading at $4.85, has declined over 41% year-to-date, though InvestingPro analysis suggests it’s trading below Fair Value.

The downgrade reflects Rothschild Redburn’s revised outlook on Under Armour’s recovery timeline, with the firm noting that earnings troughs tend to be "deeper and time scales longer" than previously anticipated.

Despite acknowledging that Under Armour has "reset and improved the business creating a base for a brighter future," the firm cited deteriorating external conditions as key factors in its decision to lower expectations.

Specific challenges mentioned include tariff impacts on both margins and demand, alongside a "slower, more complex, industry backdrop to navigate," which have collectively delayed the firm’s projected timeline for top-line and bottom-line recovery.

Rothschild Redburn’s new $6.00 price target for Under Armour equates to 0.5 times the company’s estimated 2027 sales, reflecting a more cautious stance on the athletic apparel maker’s near-term prospects.

In other recent news, Under Armour has made several significant announcements. The company held its annual meeting of stockholders, where all nominated directors were re-elected to the board. Additionally, Under Armour announced that it has satisfied and discharged its 3.25% Senior Notes due in 2026, releasing the company from remaining obligations under these notes. In the realm of analyst evaluations, Williams Trading lowered its price target for Under Armour to $7.00, citing a longer timeline for brand improvements, although it maintained a Buy rating. CFRA upgraded its rating for Under Armour from Sell to Hold, attributing the decision to fair valuation and lowered expectations. Meanwhile, Truist Securities reduced its price target to $5.00 due to tariff concerns, maintaining a Hold rating. These developments highlight ongoing adjustments in the company’s financial strategies and market positioning.

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