UPDATE: Morgan Stanley Downgrades Under Armour to Equal-Weight

In a report published Monday, Morgan Stanley downgraded its rating on Under Armour (NYSE: UA) from Overweight to Equal-Weight.

Morgan Stanley noted, “While we believe in the long-term viability of the brand, we think there is less margin upside than we previously estimated and we are lowering estimates accordingly. Our estimates are now in line with consensus and we are concerned that multiple contraction is more likely than expansion. We previously modeled 80 bps of operating expansion driven by gross margin expansion and flat SG&A but now believe the company will be re-investing in SG&A to build out infrastructure, which limits upside to EPS. Our 2013 EPS estimate go to $1.52 from $1.63 and 2014 EPS estimate goes to $1.87 from $2.11.”

Under Armour closed on Friday at $49.35.

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