UPDATE: D.A. Davidson Downgrades Under Armour to Neutral, Raises PT as Shares Approach Price Target

In a report published Friday, D.A. Davidson analyst Andrew Burns downgraded the rating on Under Armour UA from Buy to Neutral, but raised the price target from $79.00 to $85.00. In the report, D.A. Davidson noted, “Downgrading to NEUTRAL as shares approach price target (previously Buy). With shares up over 65% YTD, UA's valuation multiple has steadily crept up to its current level of 43x our 2014 EPS estimate. While optimism around UA's growth potential is well deserved, we are incrementally more concerned about the current risk/reward profile at current valuation levels. UA's lofty valuation adequately reflects UA's substantial long-term growth prospects, but also creates significant downside risk from even the smallest operational hiccup or market pullback. 2H earnings upside potential remains, but will it satisfy lofty investor expectations? Similar to 1H results, we believe 2H results will bring a modest upward drift to full year guidance. In our view, this will be entirely from company specific growth initiatives including outlet store growth and wholesale apparel strength rather than broad based consumer strength. At the current share price, we believe investor expectations for material upward earnings revisions in 3Q and the 2H are high.” Under Armour closed on Thursday at $80.59.