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UBS maintains buy on Under Armour with $12 price target

Published 02/05/2024, 12:43 PM
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On Monday, UBS has maintained its Buy rating and $12.00 price target for Under Armour (NYSE:UA), Inc. (NYSE:UAA). The firm's analyst expressed confidence in the company's third-quarter fiscal year 2024 performance, suggesting that it likely met expectations.

The analyst highlighted that a relatively strong U.S. holiday season could have surpassed market predictions, potentially compensating for weaker sales in Europe and China. This positive outlook in the U.S. is anticipated to enable Under Armour to sustain its full-year 2024 earnings per share (EPS) guidance.

The market's expectations were leaning towards a slight decrease in the company's FY24 EPS forecast. However, UBS anticipates that maintaining the guidance could improve investor sentiment, as there is a perceived tendency for the stock to lean towards the upside.

The options market is pricing in a +/- 9.9% movement in Under Armour's stock price around the earnings announcement, which is in line with the historical average movement. UBS agrees with the options market's assessment, suggesting potential for stock price volatility in response to the earnings report.

Under Armour has not made any official comments regarding its third-quarter performance or the outlook for its full-year 2024 EPS at this time. The company's stock performance following the earnings release will be closely watched by investors and analysts alike.

InvestingPro Insights

Under Armour, Inc. (NYSE:UAA) is currently trading at an attractive earnings multiple, with a P/E Ratio (Adjusted) for the last twelve months as of Q2 2024 standing at 8.02. This low valuation may catch the eye of value investors looking for potential bargains in the stock market.

InvestingPro data also indicates that Under Armour's liquid assets surpass its short-term obligations, which suggests a solid financial position that could reassure investors of the company's ability to meet its immediate financial liabilities. This is particularly relevant given the analyst's optimism about Under Armour's ability to sustain its full-year 2024 EPS guidance.

Despite recent price volatility, with a 1 Year Price Total Return as of Day 36 of 2024 showing a significant decline of -38.78%, Under Armour has been profitable over the last twelve months, which aligns with analysts' predictions that the company will remain profitable this year. This could provide a foundation for potential recovery in stock price, especially if the company's upcoming earnings report reflects a strong performance.

For investors looking for more in-depth analysis, there are additional InvestingPro Tips available. Under Armour operates with a moderate level of debt and does not pay a dividend to shareholders, which could be important factors for investors who prioritize growth over income. Moreover, the company has been characterized by analysts as having quite volatile stock price movements, which may present opportunities for traders with a higher risk tolerance.

Subscribers can find more exclusive tips on Under Armour by visiting InvestingPro. With the special New Year sale, subscriptions are available at up to a 50% discount. Plus, use coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription. In total, there are 7 InvestingPro Tips which could provide further insights into Under Armour's financial health and stock performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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