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Under Armour's Sweating 1Q17, But Why?

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Part 7
Under Armour's Sweating 1Q17, But Why? PART 7 OF 7

Under Armour on the Street: What the Analysts Suggest Now

Comparing Under Armour’s ratings with those of peers

Under Armour (UAA) is covered by 33 Wall Street analysts who collectively have a neutral view on the company. The company’s shares are rated a 2.8 on a scale of 1-strong buy to 5-sell. It was rated a 2.3 before its 4Q16 results.

By comparison, peers Lululemon Athletica (LULU), Columbia Sportswear (COLM), and Nike (NKE) have collective ratings 2.5, 2.2, and 2.2, respectively.

Under Armour on the Street: What the Analysts Suggest Now

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Recommendations

The majority of the analysts—around 55%—continue to recommend a “hold” for Under Armour’s stock, while 27% suggest buying it. By comparison, 63% analysts suggest a “buy” Nike, while 70% recommend a “buy” Foot Locker (FL).

So far, 18% analysts have a “sell” recommendation on UAA stock. Recently, FBR Capital downgraded Under Armour to an “underperform” from a “market perform” rating, citing the ongoing price war with Nike (NKE), lack of innovation, and unfavorable trends for Under Armour’s products as key reasons.

Before the company’s 4Q16 results, only 3% of the Wall Street analysts recommended a “sell” for UAA stock. There was no “sell” recommendation on the stock, however, until January 2016.

Under Armour’s upside

Wall Street has currently set an average target price of $22.35 on Under Armour stock, indicating an upside of about 16% over the next year. Notably, the retailer has a better upside than Nike and Columbia Sportswear, whose stock prices are expected to jump 13% and 8%, respectively. Lululemon, however, has the highest upside of 22%.

ETF investors seeking to add exposure to UA can consider the iShares US Consumer Goods ETF (IYK), which invests 0.26% of its portfolio in the company.

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