Under Armour Q1 Report: Citi Lowers Price Target to $5.50 and Keeps Neutral Rating

Citi analyst Paul Lejuez lowered Under Armour's price target to $5.50 from $6 and maintained a Neutral rating following the company's Q1 report. Citi believes Under Armour faces challenges in the current macro environment and its market share losses can continue into summer 2026.

Citi analyst Paul Lejuez has adjusted Under Armour's (UAA) price target to $5.50 from $6.00, maintaining a Neutral rating following the company's Q1 report. The change reflects Citi's assessment of the current macroeconomic environment and the potential for market share losses to persist through summer 2026 [1].

Under Armour's recent financial performance has been a mixed bag. While the company reported adjusted operating income of $166 million and adjusted EPS of $0.30 for Q2 2025, it also faced an 11% revenue contraction and a projected 6–7% decline for fiscal 2026. These challenges have prompted a strategic pivot toward premium branding and operational efficiency [1].

Citi's concern lies in the broader market dynamics. The athletic apparel industry is highly competitive, with giants like Nike and Lululemon dominating the market. Under Armour's 2.70% market share places it in the mid-tier, and the company must navigate tariff vulnerabilities and market share erosion to maintain its relevance [1].

The restructuring plan, which includes exiting a California distribution facility and streamlining operations, aims to reduce overhead and improve agility. However, the projected $100 million tariff impact and soft demand in key regions remain significant headwinds [1].

Under Armour's focus on performance innovation, such as its HeatGear and ColdGear technologies, provides a competitive edge. However, the brand must contend with Lululemon's cult-like loyalty and Nike's global reach. The key differentiator is Under Armour's focus on team sports and global football, a niche where it can leverage its heritage without directly clashing with rivals [1].

Citi's Neutral rating reflects a cautious stance on Under Armour's ability to execute its turnaround plan. The company's cash reserves and debt-free balance sheet provide flexibility, but the projected $100 million tariff impact and soft demand in North America and Asia-Pacific remain headwinds [1].

For investors, the path forward for Under Armour is a high-risk, high-reward proposition. The company's strategic clarity and brand equity offer potential for long-term growth, but execution risks, market share erosion, and tariff vulnerabilities could delay profitability [1].

References:
[1] https://www.ainvest.com/news/armour-strategic-turnaround-profit-warnings-evaluating-long-term-investment-potential-disrupted-athletic-apparel-market-2508/
[2] https://www.gurufocus.com/news/3053012/under-armour-uaa-citigroup-adjusts-price-target-amid-neutral-rating-uaa-stock-news
[3] https://ca.investing.com/news/analyst-ratings/under-armour-stock-price-target-lowered-to-5-at-truist-on-tariff-concerns-93CH-4150313