Friday, an analyst from BMO Capital maintained an Outperform rating and a $12.00 price target on shares of Under Armour (NYSE:UA), Inc. (NYSE: UAA), currently trading at $9.59. According to InvestingPro data, 11 analysts have revised their earnings upward for the upcoming period, with analyst targets ranging from $4 to $16. The endorsement comes after a recent meeting with the sportswear company's management, which detailed strategies for brand enhancement and operational efficiencies.
The analyst highlighted Under Armour's approach, characterized by a philosophy of "Achieve More, by Doing Less," which aims to "premiumize" the brand. The company's management plans to improve efficiency and shift focus towards their higher-end product offerings, moving away from their previous reliance on lower-tier products. With a healthy gross profit margin of 46.83% and strong liquidity indicated by a current ratio of 2.18, this strategic pivot is expected to be supported by significant marketing initiatives.
Management's self-identification as an "Underdog" resonates with the analyst's view that Under Armour's stock is likely to experience a pattern of rising and then receding to higher lows as it works to regain investor confidence. This pattern is evident in the stock's impressive 41.86% return over the past six months. The analyst agrees with this characterisation and anticipates that the company's shares will continue this trend.
Following the meeting, the analyst expressed continued enthusiasm for Under Armour's potential for meaningful EBITDA and EPS growth. The prospects for the company's financial performance were outlined in BMO Capital's recent analysis report titled "Under Armour's Under Appreciated: P&L Deep Dive."
The analyst concluded by recommending investors to buy into the current dip in Under Armour's stock price. The sentiment reflects an optimistic outlook for the company's efforts to reposition itself and attract renewed investor interest, with InvestingPro's Fair Value analysis suggesting the stock is currently undervalued.
In other recent news, Under Armour Inc (NYSE:UAA). has been the focus of various significant developments. The company reported a decrease in Q2 revenue by 11% to $1.4 billion and a drop in e-commerce sales. Despite this, the company exceeded expectations in terms of operating income and earnings per share. Under Armour is shifting its focus towards a more premium market position and enhancing its direct-to-consumer channels.
Analysts from various firms including William Blair, Baird, Citi, Needham, and Telsey Advisory Group have maintained neutral ratings, with varying price targets. These ratings come after the company reaffirmed its fiscal 2025 full-year outlook and outlined strategic initiatives to strengthen its brand and enhance shareholder value. The majority voting control held by CEO Kevin Plank is also a point of consideration for investors.
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