Wall Street’s reaction to Under Armour’s 3Q17 results
Under Armour’s (UAA) 3Q17 results and guidance revision were followed by a series of analyst actions that ranged from target price cuts to downgrades. Among the brokers that revised UAA’s price target were UBS (from $19 to $14), Canaccord Genuity (from $15 to $8), Bernstein (from $14 to $9), Wedbush (from $17 to $11), Citigroup (from $21 to $14), Barclays (from $20 to $15), Cowen and Company (from $18 to $12), and Deutsche Bank (from $14 to $11). All of the mentioned brokers’ recommendations for UAA remained the same.
Wall Street recommendations
Off the 33 analysts covering Under Armour, 22% recommend “sell,” the highest proportion of “sell” recommendations for any sportswear stock. In comparison, Nike (NKE), Lululemon Athletica (LULU), and Columbia Sportswear (COLM) have received “sell” recommendations from 3%, 6%, and 5% analysts covering them, respectively. For UAA, 55% of analysts recommend “hold,” and 12% recommend “buy,” and it currently has an average price target of $13.86. The company has an upside of 15% over the next 12 months.
Wall Street ratings
Under Armour’s ratings have deteriorated since its 3Q17 results. The company is now rated a 3.3 on a scale of 1 (“strong buy”) to 5 (“sell”). It was rated 3.1 before its 3Q17 announcement and 2.9 two months ago. At the beginning of the year, the company had a high rating of 2.3, in line with peers NIKE (2.3), COLM (2.3), and LULU (2.4). Investors seeking exposure to Under Armour could consider the PowerShares S&P 500 High Beta Portfolio ETF (SPHB), which invests 0.73% of its portfolio in the company.