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.