Shares of Under Armour Inc (NYSE:UAA) recovered slightly in early trading on Wednesday, after tanking on Monday following the company's fiscal fourth-quarter results.
Here are the key analyst insights:
- Stifel analyst Peter McGoldrick downgraded the rating from Buy to Hold and lowered the price target from $9 to $6.
- Truist Securities analyst Joseph Civello reaffirmed a Hold rating, while reducing the price target from $8 to $5.
- Guggenheim Securities analyst Simeon Siegel maintained a Buy rating on the stock.
Check out other analyst stock ratings.
Stifel: Under Armour's turnaround, with a return to "more appropriate growth and profitability," is delayed, McGoldrick said in the downgrade note. He added that the downgrade in rating reflects:
- The company's higher than previously anticipated SG&A expense
- Inflection to a normalized net debt position
- Continued challenges to topline growth
While Under Armour's increase in investments supports its brand premiumization strategy, it raises the point at which revenues translate to "growth-driven value creation," the analyst stated. Apart from the higher investments, he expressed concern about global competition and a decline in international contributions.
Truist Securities: Under Armour reported its revenues at $1.17 billion, which represented a year-on-year contraction of around 4% on a constant currency basis, but came in-line with Street expectations, Civello said. The company's adjusted gross margins of 43.1% missed consensus of 44.2%, he added.
Margin pressure was mainly due to higher tariffs, higher product costs, pricing headwinds, and an unfavorable regional mix, the analyst stated. Management's guidance for fiscal 2027 came in below expectations, "despite embedding a ~150bps GM benefit from potential tariff refunds," he further wrote.
Guggenheim Securities: Under Armour reported a modest earnings miss, with in-line sales being offset by a miss on gross margins, Siegel said. While sales growth in North America declined and came in short of expectations, international sales grew by 10% or 3% in constant currency terms, he added.
For fiscal 2027, the company guided to a slight revenue decline versus the previous year, the analyst stated. Management projected adjusted EBIT of $140-$160 million, in-line with expectations, and adjusted earnings between 8 cents and 12 cents per share, below consensus of 23 cents per share, he noted.
Price Action
Shares of Under Armour had risen by 2.27% to $5.16 at the time of publication on Wednesday.
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