Under Armour Stock Performance Analysis

On Friday, Under Armour (NYSE:UA)'s stock continued its downward trajectory, dropping as much as 8.8%, following a decline the previous day. The downturn occurred after the company's investor day on December 12, which prompted analysts to assess the sporting company's future potential. This presentation contributed to a 13% decrease in shares over the week, as investors processed the details of the company's strategy.

Analyst Perspectives

BMO Capital

BMO Capital expressed measured optimism regarding Under Armour's future. While the investor day was sparse on numerical data, it emphasized the company's strategy to "premiumize" the brand and indicated substantial marketing efforts ahead. The firm identified potential in the company's EBITDA/EPS opportunity but expects shares to continue fluctuating as Under Armour seeks to regain investor confidence.

Morgan Stanley

Conversely, Morgan Stanley maintained a cautious outlook, stating that although Under Armour's strategic plan is coherent and the leadership credible, the market remains doubtful about the timeline for the company's turnaround. Their Underweight thesis persists, highlighting the nascent phase of the turnaround and potential risks to future EPS.

BofA Securities

BofA Securities offered insights into Under Armour's product line, especially in footwear, noting positive feedback from retail partners. They emphasized the return of founder Kevin Plank as President and CEO, highlighting his optimistic approach to reviving the brand. However, they also indicated that elevating product quality and reducing promotions—crucial for margin improvements—are still in the early stages.

TD Cowen

TD Cowen revised their expectations for Under Armour's marketing expenditures, predicting higher costs as the company seeks to reposition its brand. They raised their price target to $11, fueled by optimism for a product-led turnaround, though they acknowledged the competitive risks involved.

Needham

Needham assessed the investor day as qualitatively beneficial, though lacking quantitative metrics. The CFO reiterated guidance without a formal presentation, and while Needham found the core strategies reasonable, they remained uncertain about execution. They expect significant turnaround evidence to emerge by Fall/Winter 2025.

Telsey

Telsey commented on the management's awareness of challenges and vision for the brand's future. However, the absence of a clear growth timeline and the need for more retail partnerships and a balanced physical retail distribution strategy highlighted the necessity for more detailed product and distribution plans.

Truist

Finally, Truist noted incremental positivity about product innovations and growth opportunities. Still, they emphasized that clarity on future growth remains scarce at this initial stage of the turnaround, awaiting more definitive data points that demonstrate new products and strategies are effectively driving growth.

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