UBS on Monday increased its price target for Under Armour, Inc. (NYSE:UAA) to $11.00 from $8.00 and maintained a Buy rating on the athletic apparel maker’s shares. The firm highlighted the enduring value of the Under Armour name as a key asset, and said it expects the company to exploit that franchise more effectively than it has in recent years.
According to UBS, the company’s suite of strategic initiatives should support an improvement in North America revenue growth rates - an outcome the broker believes would help improve investor sentiment toward the stock. The firm said Under Armour’s third-quarter report strengthened its conviction in that trajectory and led UBS to raise its earnings per share estimates in conjunction with the price-target increase.
UBS’s new target is noted to align closely with InvestingPro’s Fair Value assessment, which the article cites as indicating Under Armour remains undervalued even after a strong market performance. The stock has recorded an impressive 52.1% gain year-to-date, but the firm and InvestingPro appear to see further upside.
Other sell-side and market developments have emerged alongside UBS’s revision. Truist Securities increased its price target to $8.00 from $6.00 while holding a Hold rating, citing the company’s quarterly results and guidance raise. Williams Trading raised its target to $10.00 from $8.00 and kept a Buy rating, pointing to confidence in Under Armour’s marketing strategies. Baird lifted its target to $7.00 from $5.50 and maintained a Neutral rating, calling attention to potential macroeconomic factors that could work in the company’s favor.
In a separate mention within the reporting, UBS is described as continuing to support Under Armour with a Buy rating and an $8.00 price target, noting the company’s potential for meaningful growth and projecting a 25% five-year compound annual growth rate in earnings per share. The presence of both the $11.00 target and an $8.00 reference appears in the surrounding market commentary.
Beyond analyst activity, Fairfax Financial disclosed a 22.2% stake in Under Armour, equating to ownership of over 41 million Class A shares. Fairfax characterized the investment as strategic and indicated the possibility of adding to its position. That substantial ownership position adds an element of institutional conviction and potential strategic influence over the company’s future direction.
Overall, the collection of analyst adjustments, the disclosed Fairfax stake, and UBS’s revised forecasts paint a picture of increased optimism about Under Armour’s turnaround in North America and its ability to extract greater value from its brand and go-to-market efforts.
Key points
- UBS raised its price target to $11.00 from $8.00 and maintained a Buy rating, citing brand value and expected North America revenue improvements.
- Several other brokers adjusted targets upward after Under Armour beat quarterly expectations and raised guidance; these moves span Hold, Neutral, and Buy ratings.
- Fairfax Financial disclosed a 22.2% stake, owning over 41 million Class A shares and signaling strategic interest.
Risks and uncertainties
- Execution risk on North America turnaround - the company’s ability to convert strategic initiatives into sustained revenue growth in the region is central to the outlook.
- Macroeconomic sensitivity - as noted by Baird, broader macro factors could influence performance and investor sentiment in the apparel and retail sectors.
- Analyst and valuation variance - divergent price targets and commentary illustrate differing views on the timeline and magnitude of Under Armour’s recovery.