Piper Jaffray analysts today offered some cautious commentary on sporting apparel giant Under Armour Inc (NYSE:UA) and financial services firm Zions Bancorporation (NASDAQ:ZION). The analysts cut their price targets for the stocks, while throwing up a few red flags.
Under Armour Inc
Piper Jaffray analyst Erinn Murphy reiterated a Neutral rating on shares of Under Armour, while reducing the price target to $64 (from $88), which represents a potential downside of 6% from where the stock is currently trading.
Murphy explained, “We remain cautious on UA near-term given current valuation as well as our concerns on footwear inventory in the channel, challenges with a key retail partner (Sports Authority) and the lingering impacts of a significantly warmer winter season. While shares have come in 36% since their recent high, we are not in a market environment where high multiple names are finding their footing on less-than-pristine reports.”
“While we believe a gross margin “miss” and lackluster apparel growth is largely anticipated by the Street, we believe UA’s inventory vs. sales growth gap will widen from Q3. We’d expect mgmt to reiterate (not raise) its FY16 guidance (25% sales; 23% EBIT growth) but see risk to the Street’s Q1 and FY16 EPS,” the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Erinn Murphy has a yearly average return of -12.7% and a 30.0% success rate. Murphy has a 21% average return when recommending UA, and is ranked #3528 out of 3593 analysts.
Out of the 12 analysts polled by TipRanks in the last 3 months, 9 rate Under Armour stock a Buy, 2 rate the stock a Hold and 1 recommends a Sell. With a return potential of 47%, the stock’s consensus target price stands at $99.89.
In addition, Piper Jaffray analyst Kevin Barker reiterated a Neutral rating on shares of Zions Bancorp, while reducing the price target to $26 (from $31), after the commercial bank reported fiscal fourth quarter earnings on Monday afternoon.
Barker commented, “Our lower price target reflects the decline in value for asset sensitivity in the current economic environment and an increase in our estimate for “normalized” provisions. ZION reported a decent number this quarter, reporting $0.43 per share in EPS, but after normalizing the tax rate to 35% and adjusting for NII recoveries, we estimate an operating number closer to $0.37 (inline with our estimate but $0.02 light of the Street). However, the Street is obviously more concerned about the company’s energy exposure with the stock trading at close to 75% of TBV.”
According to TipRanks.com, analyst Kevin Barker has a yearly average return of 2.5% and a 57% success rate. Barker has a -7.1% average return when recommending ZION, and is ranked #696 out of 3593 analysts.
Out of the 12 analysts polled by TipRanks, 7 rate Zions Bancorporation stock a Buy, 4 rate the stock a Hold and 1 recommends a Sell. With a return potential of 48%, the stock’s consensus target price stands at $31.90.