UAA: UBS Issues Buy Call at $8 Target — But $434M Growth Misrepresentation Settlement Still Weighs
Court: D. Maryland
Case: 1:17-cv-00388
UBS analyst Jay Sole has reiterated a Buy rating on Under Armour 
UA, setting an $8.00 price target, up from the stock’s recent close at $7.16. Sole, who covers major names in the consumer cyclical sector, points to a potential rebound despite ongoing headwinds. Still, Under Armour’s investor base remains cautious as the company continues to face the aftermath of a $434 million settlement over past revenue growth misrepresentations and executive-level shakeups.
Analyst Upgrade: What to Know
- Buy Rating Maintained: UBS’s Jay Sole reaffirms bullish outlook with $8 price target
- Stock Price: UAA last closed at $7.16, implying upside potential
- Mixed Market Sentiment: Broader analyst consensus remains Hold, with a $6.84 average target
- Past Earnings Miss: Q4 net profit fell sharply to $1.23M from $110.75M the year prior
- Revenue Pressures: Latest quarterly revenue at $1.4B, down from $1.49B year-over-year
- Sector Focus: UBS coverage includes consumer brands like Deckers and TJX Companies
Timeline Overview
- April 21, 2016: Under Armour posts strong Q1 earnings, marking 26 straight quarters of 20%+ growth
- January 31, 2017: Reports weaker-than-expected Q4 results; CFO Lawrence Molloy resigns
- January 31, 2017: Stock drops 26% on earnings miss and executive exit
- February 10, 2017: Investors file lawsuit alleging misleading financial guidance
Allegations Include
- Overstating ability to maintain high revenue growth rates
- Failing to disclose internal challenges including inventory issues and retail partnerships
- Withholding material information about declining financial performance until Q4 2016
Investor Update
Under Armour has agreed to a $434 million settlement to resolve claims that it misled investors about its financial condition and growth trajectory during a critical period between 2016 and 2017. The agreement marks one of the larger investor payouts in the sector, and while it closes a major legal chapter, questions remain about the company’s ability to consistently deliver earnings growth under shifting market conditions.
You can check more information about it and file for a payout HERE.