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How Wall Street Views Under Armour in the New Year

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Jan. 18 2018, Updated 3:34 p.m. ET

Wall Street’s recommendations on UAA

As we discussed previously in this series, Under Armour (UAA) was downgraded by two brokerage houses in the first two weeks of January 2018. Macquarie lowered UAA to “underperform” while Susquehanna downgraded it to “negative.” Buckingham Research, however, initiated UAA with a “neutral” rating on January 5.

Under Armour is covered by 31 Wall Street analysts, who jointly rate it a 3.2 on a scale of 1.0 (strong buy) to 5.0 (strong sell). The company was rated a 2.3 in January 2017.

UAA is among the lowest-rated sportswear companies. Competitors Lululemon Athletica (LULU), Columbia Sportswear (COLM), Skechers (SKX), and Nike (NKE) are currently rated 2.2, 2.2, 1.5, and 2.4, respectively, by Wall Street analysts.

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Recommendations

About 35.0% of the analysts covering UAA have recommended selling the stock. This percentage is much higher than that of its peers. In contrast, 6.0% and 3.0% of analysts suggest selling Nike and LULU. There were no “sell” recommendations on Skechers and Columbia Sportswear.

With respect to the “buy” recommendations, only 16.0% of analysts suggest buying UAA stock. In comparison, 55.0%, 53.0%, and 100.0% of analysts recommend buying Lululemon, Nike, and Skechers.

Target price

Under Armour (UAA) is currently trading at $13.81. It traded at more than $50.00 in 2015. Over the last 12 months, the company has lost ~53.0% and is sitting 120.0% below its 52-week-high price.

Wall Street does not foresee a near-term revival in Under Armour stock. Analysts have set an average target price of $13.83, with a 0% upside, on the company’s stock.

ETF investors seeking to add exposure to UAA can consider the iShares US Consumer Goods ETF (IYK), which invests 0.15% of its portfolio in the company.

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