Market reaction to Under Armour’s 4Q17 results
Investors turned bullish on Under Armour (UAA) after the company reported a top-line beat, driven by a strong international performance. UAA stock saw one of its best days in the last two years, with the stock rising more than 17% to close at $16.70 on February 13, 2018.
Its 4Q17 results were able to stop the slide in the stock and convert its YTD (year-to-date) losses into a marginal gain of 1%.
UAA was one of the top losers among apparel stocks in 2017. Its share price crashed 50% during the year. In comparison, competitors Nike (NKE) and Lululemon Athletica (LULU) both recorded about 20% gains, while Skechers (SKX) surged 50% during the year.
Under Armour stock has been very sensitive to its results. It rose 10% after beating 1Q17 expectations and then fell 9% and 24% after its 2Q17 and 3Q17 results, respectively.
Analysts’ actions after 4Q17 results
None of the analysts covering UAA stock changed their recommendations after the 4Q17 results. But many of them revised their price targets. They included Cowen and Company (from $12 to $15), Instinet (from $9 to $10), Wedbush (from $12 to $14), Telsey Advisory (from $13 to $15), and JPMorgan (from $10 to $13).
UAA stock now has an average price target of $13.96, reflecting a downside of 16%. The company is covered by 30 Wall Street analysts who have jointly rated the stock a 3.2 on a scale of 1 for “strong buy” to 5 for “sell.” About 17% of the analysts, including Stifel Nicolaus, have recommended a “buy” for the stock. About 47% of the analysts, including Buckingham and SunTrust Robinson, have suggested a “hold,” and 37% have recommended a “sell.”
UAA has the highest percentage of “sell” recommendations among the sportswear peer group. In comparison, Nike (NKE) and Lululemon Athletica (LULU) have “sell” recommendations from 6% and 3% of analysts, respectively. There are no “sell” ratings for Columbia Sportswear (COLM) or Skechers (SKX).