Under Armour, Inc. (UAA) PT Lowered to $30 at Wells Fargo

Wells Fargo analyst Kate Fitzsimons lowered the price target on Under Armour, Inc. (NYSE: UAA) to $30.00 (from $33.00) while maintaining an Overweight rating following results.

The analyst commented, "UAA's 4Q capped off 2021 on a high note--with revenues +9% (Street 6%), adj. GMs +40-bps vs. guidance for ~150-bps of degradation, and adj EPS of $0.14 vs. Street $0.06. With the change in the company's FYE to March, UAA issued guidance just for the March quarter, now looking for +MSD revenues (from +LSDs) despite 10% of supply chain revenue headwinds but EBIT $/EPS guided below the Street ($30-$35MM/$0.02-$0.03 vs. Street $102MM/$0.15) largely on higher freight headwinds (est. 240-bps) and marketing spend. While the 1HF23 freight comments are likely to pressure buy side estimates (we est. buy side closer to ~$0.90 in FY23 vs. the dream ~$1), we see UAA's brand heat, quality of sales, and LT leverage potential as on firmer footing into FY23, which can drive ongoing upside in the stock particularly now with expectations further reset."

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