Market Overview

UPDATE: CRT Capital Initiates Coverage On Under Armour, Notes Modest Upside

Share:
Related UA
5 U.S. Stocks Trading Over 100x Cash Flow
KeyBanc Steps To The Sidelines On Under Armour, Notes Shares Already Trading At Premium Valuations
It Was Wrong To Sell Facebook - Cramer's Mad Money (7/30/15) (Seeking Alpha)

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

DateFirmActionFromTo
Jul 2015Argus ResearchUpgradesHoldBuy
Jul 2015KeyBancUpgradesUnderweightSector Weight
Jul 2015Canaccord GenuityMaintainsBuy

View More Analyst Ratings for UA
View the Latest Analyst Ratings

Posted-In: CRT CapitalAnalyst Color Price Target Initiation Analyst Ratings

 

Related Articles (UA)

Get Benzinga's Newsletters