01:45 PM EDT, 05/23/2024 (MT Newswires) -- Under Armour ( UAA ) has longer-term potential, however, it is best to move to the sidelines and wait for a clear indication of better fundamental momentum, Oppenheimer said in a note Thursday.

Oppenheimer analysts, including Brian Nagel, said founder and former CEO Kevin Plank resumed the chief executive role following several unsuccessful efforts by senior leaders to streamline its business model and boost product innovation for consistent sales growth and market expansion.

"While we still look optimistically towards the longer-term potential for Under Amour, particularly now with Kevin back at the helm, we recognize that positive change at the company will require time," the analysts said. "We recommend clients move to the sidelines, and await clearer signals of improving fundamental momentum, before buying UAA shares."

Insights from management of several top athleisure brands pointed to more volatile consumer demand patterns and increased price promotions in the sector recently, the report said.

"We look upon a now less favorable sector backdrop as another, potentially significant hindrance to re-positioning efforts at Under Armour ( UAA ), nearer-term," the analysts said.

Oppenheimer downgraded Under Armour ( UAA ) to perform from outperform.

Price: 6.77, Change: -0.18, Percent Change: -2.59