On Friday, Citi analyst Paul Lejuez adjusted the price target for Under Armour (NYSE:UA), Inc. (NYSE:UAA) shares to $8.00, down from the previous $12.00, while maintaining a Neutral rating. The stock, currently trading at $7.60, has experienced a sharp 9% decline over the past week, according to InvestingPro data. The revision followed Under Armour’s third-quarter earnings report, which revealed earnings per share (EPS) of $0.08, surpassing the consensus estimate of $0.04. This outperformance was attributed to stronger sales and gross margin (GM), although the increase in EPS was constrained by higher-than-anticipated selling, general, and administrative expenses (SG&A).
Under Armour’s management highlighted the need for additional marketing investments to target a younger demographic, projecting a 4-5% rise in fourth-quarter SG&A despite an anticipated 14% decline in sales. This indicates a strategic shift towards higher spending in fiscal year 2026. Furthermore, general and administrative costs saw a mid-single-digit increase in the third quarter, marking a significant deviation from the first half’s 7% decrease.
The third-quarter sales beat was primarily due to stronger performance in North America (NAM). However, management did not link this success to its North American turnaround strategy and refrained from committing to growth in this region for fiscal year 2026, signaling that their visibility into future performance remains low. Given the ramp-up in SG&A spending, which is no longer seen as a potential source of margin improvement, and the ongoing uncertainty surrounding a turnaround in North America, Citi anticipates less potential for EPS growth in fiscal year 2026. The analyst’s stance reflects a balanced view of the risks and rewards associated with Under Armour stock.
In other recent news, Under Armour, Inc. has been the subject of several analyst notes. CFRA has raised its stock price target for Under Armour from $4 to $5, maintaining a Sell rating due to the company’s underperformance relative to its competitors. Citi analysts, on the other hand, have maintained a Neutral rating on the company’s stock, with a steady price target of $12. They anticipate an increase in the fiscal year 2025 EPS guidance following the third quarter performance.
UBS has reduced its price target for Under Armour from $16 to $15, sustaining a Buy rating. This adjustment follows the assessment of the company’s upcoming third-quarter earnings report and overall performance expectations. Meanwhile, Argus analysts have downgraded Under Armour from Buy to Hold, in view of the company’s ongoing challenges in the post-pandemic period.
Finally, Raymond (NSE:RYMD) James has reiterated a Market Perform rating on Under Armour following the company’s 2024 Investor Day. Despite the company’s strategic plan, Under Armour is considered a "show me story" that needs to deliver tangible results. These are the recent developments concerning Under Armour, reflecting various perspectives from different analyst firms.
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