UBS reiterates Buy rating on Under Armour stock with $8 target

On Thursday, UBS analyst Jay Sole maintained a Buy rating on Under Armour (NYSE:UA), Inc. (NYSE:UAA) with a steadfast price target of $8.00, as the stock trades near $6.39. According to InvestingPro data, 11 analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s trajectory. Sole’s assessment hinged on the strength of the Under Armour brand and the company’s potential to capitalize on it more effectively than in recent years.

Sole expressed confidence in Under Armour’s recent initiatives, stating, "We believe the Under Armour brand name remains an important asset and we expect the company to better leverage it going forward than it has over the past few years." He emphasized the progress Under Armour has made in streamlining its organization and enhancing its innovation process. The company maintains a healthy current ratio of 2.1, indicating strong short-term financial stability.

Despite acknowledging the risks posed by tariffs and their subsequent effects in the near term, Sole was optimistic about Under Armour’s ability to navigate these challenges. "Tariffs and their knock-on effects are risks in the NTM, but we believe UAA’s cost discipline and mitigation strategies can offset these headwinds over time," he commented.

Looking ahead, Sole projected a significant growth trajectory for Under Armour. "We forecast a ~25% 5-yr. EPS CAGR (FY25-FY30E)," he noted, suggesting that the company’s earnings per share could see substantial compound annual growth over a five-year period.

In conclusion, Sole anticipated that Under Armour’s growth would exceed market expectations and ultimately lead to a more positive perception among investors. "We anticipate UAA’s growth will surprise the market and cause sentiment to improve," he remarked, painting a promising picture for the company’s future performance.

In other recent news, Under Armour, Inc. reported its fourth-quarter financial results, meeting earnings expectations with an increase in revenue and gross margin. However, the company’s guidance for the upcoming quarters has been met with mixed reactions from analysts. Stifel lowered its price target for Under Armour to $10 but maintained a Buy rating, citing potential growth in the coming years despite current challenges with tariffs. Truist Securities also adjusted its price target to $7, maintaining a Hold rating due to concerns about Under Armour’s ability to navigate its turnaround strategy effectively.

Morgan Stanley (NYSE:MS) reaffirmed its Underweight rating with a price target of $4, pointing to the absence of full-year guidance and a cautious outlook on earnings stability. BofA Securities reduced its price target to $8, keeping a Neutral rating, and noted the potential for margin recovery despite short-term tariff uncertainties. Evercore ISI lowered its target to $6 and maintained an Underperform rating, highlighting competitive challenges and limited pricing flexibility for Under Armour. These developments reflect the varied perspectives among analysts regarding Under Armour’s financial performance and strategic direction.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.