How Analysts Rate Under Armour ahead of Q1 Results



Analysts’ recommendations

On March 25, UBS lowered its price target for Under Armour (UAA) to $22 from $23. On April 10, Under Armour stock rose 3.0% after Citigroup raised its recommendation to a “buy” from a “neutral,” backed by the company’s renewed focus on enhancing its profitability. Citigroup increased its price estimate for Under Armour stock to $29 from $23.

As of April 30, Under Armour stock was rated a “hold” by 47% of the 32 analysts covering the apparel and footwear company. Eight analysts had a “buy” recommendation, while nine analysts had a “sell” rating.

Article continues below advertisement

YTD movement

As of April 30, Under Armour stock was up 30.7% on a year-to-date basis. In comparison, peers Nike (NKE), Columbia Sportswear (COLM), Skechers (SKX), and Lululemon (LULU) were up 18.5%, 18.9%, 38.3%, and 45.0%, respectively, on a YTD basis. As of April 30, the average 12-month price target for Under Armour (UAA) stock was $21.32, implying a downside potential of about 8.0%.

Under Armour has been facing continued weakness in its North America business, as the rivalry in the apparel and footwear space has intensified. Also, Under Armour’s performance has been hit by the business lost due to the bankruptcies of many retailers. Under Armour is trying to improve its performance through innovation, product cost improvements, enhancing direct-to-consumer business, and international expansion.

Under Armour will announce its first-quarter results on May 2. Analysts expect Under Armour’s revenue to decline 0.3% to $1.18 billion in the first quarter and earnings to break even.

Rival Skechers’ (SKX) first-quarter sales grew 2.1% to $1.28 billion driven by higher international sales partially offset by lower sales from the domestic wholesale business. Columbia Sportswear’s (COLM) first-quarter sales grew 7.8% to $654.61 million primarily driven by the strength in its US business across the direct-to-consumer and wholesale channels.


More From Market Realist