On Friday, Telsey Advisory Group adjusted its outlook on Under Armour (NYSE:UA), Inc. (NYSE:UAA) shares, increasing the price target to $10 from the previous $8, while keeping a Market Perform rating on the shares.
The move comes after Under Armour reported operating income and earnings per share that significantly surpassed expectations, despite a double-digit decline in second-quarter fiscal year 2025 sales.
The company's efforts to reduce promotional activities, clear the market, and cut costs are showing positive results. CEO Kevin Plank has outlined strategic initiatives aimed at product upgrades, new introductions, improved wholesale relationships, and enhanced profitability and performance of the retail fleet.
Under Armour is expected to reveal more about these strategic plans at an analyst day scheduled for December 12 in New York City. The adjustments to the company's strategy indicate a shift towards the right direction, although it is anticipated that it may take several quarters before a significant inflection in revenues is observed.
The stock experienced a 27% increase the previous day, which the analyst suggests might be premature given that sustained growth is not yet evident. The revised price target is based on applying a price-to-earnings (P/E) multiple of approximately 25 times, up from 20 times, to the fiscal year 2026 earnings per share estimate of $0.40. This reflects the potential for a turnaround in Under Armour's performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.