Guggenheim Maintains Their Hold Rating on Under Armour (UA)


Guggenheim analyst Robert Drbul maintained a Hold rating on Under Armour (UA) today. The company’s shares opened today at $21.05.

Drbul observed:

“We now expect a modest full-year decline in NA (vs. ~flat prior). Int’l performance was above our outlook, up 12% reported (vs. our +8%) and +17% in CC; the strongest region was with EMEA up 11% in CC. We now expect International to grow closer to the mid-teens in FY19, partially offsetting the softer NA trends (our total revenue growth forecast for FY19 moves to +3%, from +4%). Gross margin expanded 120bps to 46.5% in 2Q (vs. our +100bps est). Key drivers included: supply chain initiatives (favorable product costs and lower air freight; +110bps) and regional mix (higher margin APAC outpaced other regions; +30bps); FX was a 30bps headwind. Our 2H19 gross margin expectation is largely unchanged (+120bps in 3Q and +50bps in 4Q); we continue to expect around 80bps of full-year expansion.”

According to TipRanks.com, Drbul is a 5-star analyst with an average return of 9.9% and a 67.8% success rate. Drbul covers the Services sector, focusing on stocks such as National Vision Holdings Inc, Capri Holdings Limited, and Ascena Retail Group.

Currently, the analyst consensus on Under Armour is a Moderate Buy with an average price target of $26, implying a 23.5% upside from current levels. In a report issued on July 24, Pivotal Research also reiterated a Hold rating on the stock with a $25 price target.

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Under Armour’s market cap is currently $11B and has a P/E ratio of 112.39. The company has a Price to Book ratio of 4.63.

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Under Armour, Inc. engages in the development, marketing, and distribution of branded performance apparel, footwear, and accessories for men, women, and youth. It operates through the following segments: North America, EMEA, Asia-Pacific, Latin America, and Connected Fitness. The North America segment comprises of U.S. and Canada.

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