Under Armour Inc (NYSE:UA)'s upcoming first quarter fiscal 2027 earnings report is unlikely to be a significant catalyst for the stock, according to UBS analysts, who expect the results to largely meet market expectations while maintaining its positive long-term view on the company.
The firm expects Under Armour to report in-line Q1 earnings and reiterate its fiscal 2027 adjusted earnings per share guidance of $0.08 to $0.12.
UBS also expects the company to issue Q2 EPS guidance in the range of $0.03 to $0.05.
UBS wrote that while investor sentiment toward the stock remains bearish, recent share price gains and investor expectations suggest an in-line report is already largely reflected in the stock price.
"We doubt the 1Q report is a catalyst for shares," UBS wrote, adding that it does not expect the earnings release to drive meaningful changes to Wall Street earnings estimates or the company's valuation multiple.
The firm noted that options markets are pricing in a move of about 10.7% following the results, matching the stock's historical average earnings-day move, though UBS expects less volatility than that.
Despite Under Armour shares outperforming the broader market over the past three months, UBS believes investor sentiment remains negative. The firm pointed to below-average positioning data from its quantitative team, elevated short interest of about 29%, and discussions with investors that indicated limited confidence in the company's near-term revenue growth prospects.
UBS wrote that investors are broadly expecting three outcomes from the earnings report: in-line Q1 EPS, unchanged full-year guidance, and Q2 EPS guidance between $0.03 and $0.05.
The firm's channel checks and proprietary data suggest first-quarter performance should meet expectations. UBS Evidence Lab found US website traffic increased 23% year over year during the quarter, compared with 3% growth in the previous quarter, while traffic across key Asia-Pacific markets rose 11%.
Additional data cited by UBS showed solid Google search trends, strong gross merchandise value growth in China's online market, and lower promotional activity during the quarter, with average discounting declining by about 250 basis points from a year earlier.
UBS maintained its Buy rating and $10 price target on the stock, implying upside from current levels of about $7.
The brokerage said its price target is based on approximately 14 times its fiscal 2029 earnings estimate of $0.70 per share and is supported by both peer valuation comparisons and discounted cash flow analysis.
While UBS expects a balanced risk-reward profile heading into the quarterly report, it remains constructive on the company's longer-term outlook, citing expectations for improving fundamentals and its product innovation pipeline, including the recently launched Bouncy Tee.