Under Armour's Turnaround May Take Time; Investors Should Wait For 'Clearer Signals,' Says Analyst

Under Armour Inc (NYSE:UAA) last week reported a revenue decline for the fourth quarter and received a downgrade from JPMorgan.

Positive change at the company could take time and investors should remain on the sidelines until there are "clearer signals of improving fundamental momentum," according to Oppenheimer.

The Under Armour Analyst: Brian Nagel downgraded the rating for Under Armour from Outperform to Perform.

The Under Armour Thesis: Management's new restructuring plan aims at streamlining the company’s operating model, Nagel said in the downgrade note.

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Management plan to "reset meaningfully promotional activity at the brand" and has guided to a low double-digit decline in total revenues in fiscal 2024, he added.

"Senior leadership at UAA indicated clearly that meaningful levels of new, more-elevated products will not go to market until Fall/Winter of 2025," the analyst wrote. "We look upon a now less favorable sector backdrop as another, potentially significant hindrance to re-positioning efforts at Under Armour, nearer-term," he further stated.

UAA Price Action: Shares of Under Armour had declined by 2.52% to $6.78 at the time of publication on Thursday.

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