UPDATE: CRT Capital Initiates Coverage On Under Armour, Notes Modest Upside
CRT Capital initiated coverage on Under Armour (NYSE: UA), and while the company does possess great investment characteristics, CRT mentioned that the relatively high valuation when compared to peers limits upside, which was why it gave Under Armour a Fair Value rating.
CRT Capital offered its investment thesis, and a $70 price target:
“We are initiating coverage of Under Armour, Inc. with a Fair Value rating and $70 one-year price target. We believe Under Armour is very well-positioned to achieve consistent revenue and EPS growth in the 20-25%+ range over the next 3-5 years, or perhaps longer, reflecting multiple growth drivers across its product portfolio including its core wholesale apparel business, women's, footwear, running, and aggressive international expansion. In our view, the Company has the talent, resources and passion to sustain its leadership position through continuous innovation and its differentiated authentic brand image.”
CRT Capital's methodology:
“Our $70 price target is based on 60x our 2015 EPS estimate of $1.16, well above its 3-year average P/E multiple of 42x, but below its current 2014 multiple of approximately 74x. Our target also translates into a price-to-growth (PEG) multiple of approximately 2.4x our 5-year estimated EPS growth rate of 25%, about double the 1.2x average of select high-growth peers.”
Shares of Under Armour were last trading at $68.68, up 0.48 percent.
Latest Ratings for UA
|Nov 2014||BB&T Capital||Initiates Coverage on||Buy|
|Nov 2014||FBR Capital||Initiates Coverage on||Outperform|
|Oct 2014||JP Morgan||Maintains||Neutral|
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