While the Street is enthused by the progress Under Armour Inc (NYSE:UAA) made in the first-quarter, will the results be truly revolutionary for the company’s stock? Piper Jaffray analyst Erinn Murphy remains cautious.
Murphy explains, “While shares were + 10% earlier on, the stock has faded as the market digested what we believe was an inline quarter with still a 2H weighted FY17 to come. 1H guidance was provided on the call which, when taken together with Q1’s results, implies sales in the 7-8% range in Q2 (vs. Street 9.5%), GM down 180-200 bps, and EBIT contraction of ~$24M. We are worried that footwear guidance for the balance of the year appears to aggressive (Q2-Q4 implied high-teens plus) given an industry slow down in Signature BB & Steph Curry related inventory build. While int’l trends remain healthy, we believe shares are still in a show-me situation given 2H weight guide & Q3 roll out of SAP.”
As such, Murphy reiterates a Neutral rating on Under Armour with a price target of $17, which represents a potential downside of 22% from where the stock is currently trading.
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 -6.7% and a 42.5% success rate. Murphy is ranked #4420 out of 4571 analysts.
Out of the 20 analysts polled by TipRanks (in the past 3 months), 4 rate Under Armour stock a Buy, 12 rate the stock a Hold, and 4 recommend to Sell. As of this writing, the stock’s consensus target price stands at $20.36.