Under Armour (UAA) shares jumped nearly 10% on Friday (to $15.17), as Stifel Nicolaus analyst Jim Duffy upgraded his rating on the company from “hold” (assigned in October ‘16) to “buy”; while increasing the target price from $12 to $17(41.66%). Duffy anticipates a more stable athletic apparel/footwear sales environment in ’18, as demand for the company’s products has improved and price competition is showing signs of abating. Duffy also predicts that UAA’s optimized operational approach would begin to benefit the company bottom line in ’18, after years of overly aggressive expansion. Shares of the company reached a 5 ½ year low on Nov. 3rd ($11.61), following the release of a disappointing Q3 earning report; down 78% from a record high ($53.78) in September 2015. Despite Friday’s price increase, share prices remain down 47.8% YTD.
Howie Long-Short: Duffy remains an outlier among Wall Street analysts, with just 6 of 36 (FactSet) maintaining a“buy” rating (19 neutral, 11 sell) on the company and an average price target 15% below the current share price ($12.88). It’s worth noting that at least 5 high-level executives have left the company since October, but that shouldn’t be a cause for alarm. The departures come following the Q3 arrival of President & COO Patrik Frisk (formerly CEO Aldo Group); indicating a change in leadership direction, not instability within the company.
Fan Marino: UAA had the attention of Bay Area sneakerheads late last week, releasing 2 new colorways of the Curry 4; “more dubs” and “more dimes”. In an elaborate marketing campaign, the company sent fans on a digital scavenger hunt; those that found hidden drop zones were rewarded with pairs of autographed sneakers, delivered by drone. Check out this video of one of the drops, cool stuff.
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