Under Armour stock price target lowered to $7.50 at UBS on tariff impact

Investing.com - UBS lowered its price target on Under Armour (NYSE:UA), Inc. (NYSE:UAA) to $7.50 from $8.00 on Monday, while maintaining a Buy rating on the athletic apparel maker’s stock. According to InvestingPro data, the stock is currently trading at $5.44, with analysis suggesting it may be undervalued relative to its Fair Value.

The price target reduction reflects significant concerns about tariffs, which UBS indicates are having a "pronounced negative impact" on both sales and margins for fiscal year 2026. This negative outlook has prompted UBS to substantially lower its FY26 earnings per share estimates for the company. The company maintains a moderate debt level with a current ratio of 1.53, suggesting adequate liquidity to navigate near-term challenges.

Despite the near-term challenges, UBS remains optimistic about Under Armour’s long-term prospects, noting that the brand name continues to be "an important asset" that the company is expected to leverage more effectively than it has in recent years. The firm also highlighted that Under Armour has completed "considerable work" to build a stronger foundation for future growth. InvestingPro analysis reveals 13 additional key insights about UAA’s growth potential and financial health, available exclusively to subscribers.

UBS observed that Under Armour’s underlying business trends in North America had been "steadily showing signs of improvement" over the past few quarters before the tariff issues emerged. The firm’s continued Buy rating stems from its expectation of a "strong turnaround in fundamentals" in fiscal year 2027.

The investment bank believes this potential recovery could "significantly surprise" what it describes as a "very bearish" market sentiment toward the stock, based on conversations with investors.

In other recent news, Under Armour’s fiscal first-quarter 2026 results were reported, with revenue exceeding Stifel’s estimates by $2 million, although adjusted earnings per share fell short by $0.01. UBS has maintained its Buy rating and an $8.00 price target on Under Armour, anticipating that the company will surpass earnings per share expectations by one cent in the upcoming first quarter fiscal 2026 report. Meanwhile, Telsey Advisory Group has lowered its price target for Under Armour stock to $5.00 from $7.00, citing a $100 million cost increase due to tariffs expected in fiscal year 2026, which could significantly impact operating profit. Evercore ISI also reduced its price target to $5.00 from $6.00, adjusting its earnings per share forecast for the second fiscal quarter to $0.02, significantly below the Street consensus of $0.26. Despite these challenges, Stifel reiterated its Buy rating with a $10.00 price target, expressing confidence in the company’s long-term prospects. Additionally, Under Armour shares rose by 2.5% following the announcement of a trade agreement between the U.S. and Vietnam, which could influence market dynamics.

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