Under Armour Should Be A Core Long-Term Holding, Says Sterne Agee; Raises PT To $75

In a research report issued midday Thursday, Sterne Agee analyst Sam Poser reiterated a Buy rating on Under Armour Inc. (UA), and raised his price target to $75 (from $68), following today’s second quarter earnings report.

Poser noted, “Growth is strong and broad based and UA is positioned for the future. UA is well on its way to becoming the solid #2 player. Management is likely keeping extra ammunition outside of stated guidance. Spending is controlled, and necessary for the growth to continue. $5B in revenue will be realized by 2017 and $10B is not far behind that. Raising FY14/15 EPS estimates from $0.95/$1.29 to $0.96/$1.32 and introducing FY16 EPS estimate of $1.71”.

The analyst added, “UA is in a strong position to grow and capture market share at the expense of the faltering Adidas, and become the #2 athletic apparel company. We expect the growth to continue to be both robust and methodical as it has been in the past. We contend that UA can continue to generate 20%+ revenue growth for years to come, as existing categories continue to expand, international growth continues to outpace North America, and over time the brand moves into the moderate channel. We share management’s belief that UA will become a $5B brand by 2017 (a 20% CAGR). We can see $10B beyond. We believe UA should be a core long-term holding”.

According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Sam Poser currently has a one-year average return of 19.4% and a 77% success rate. Poser has a 52.3% average return when recommending UA, and is ranked #33 out of 3222 analysts.

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