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Argus defended its Buy rating on Under Armour (NYSE:UAA) (NYSE:UA) on Wednesday following the recent share price weakness.
Analyst Kristina Ruggeri said that the pullback presents investors an attractive buying opportunity. She noted that the athletic apparel company has been working to improve results by closely managing inventory, focusing on premium products, launching a rewards program, and lowering costs.
While results from those initiatives have been mixed so far, the return of CEO Kevin Plank is expected to drive growth at Under Armour (UAA) through brand elevation, improved messaging, and storytelling. “We also expect the company to benefit from its strong brand recognition, being one of just four brands that are recognized globally by consumers,” highlighted Ruggeri. Looking ahead, Under Armour (UAA) is expected to continue to develop premium products with enhanced technology following the success of its SlipSpeed sneaker and Unstoppable clothing collection.
Argus assigned a price target of $10 to UAA.
On Seeking Alpha, analyst Paul Franke has a positive long-term view on Under Armour (UAA). “When the restructuring pays dividends or the economy recovers from recession, a big price jump toward a normalized valuation gets UA and UAA closer to $10 or $15 rather quickly,” he noted recently.
Shares of Under Armour (UAA) were up 2.45% in afternoon trading on Tuesday to $7.11 vs. the 52-week range of $6.18 to $9.50. The stock trades below its 100-day and 200-day moving averages. The stock trades below its 100-day and 200-day moving averages. UAA has traded flat since Kevin Plank’s first day back in the CEO office. Short interest on UAA stands at 11.2% of the total float.
