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Brean Offers Takeaways From Under Armour's Connected Fitness Facility Tour

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Under Armour Inc (NYSE: UA) has been generated a strong top-line performance, and has a 2018 revenue target of $7.5B, representing a 4-year CAGR of 25 percent.

Brean Capital’s Eric Tracy maintained a Buy rating for the company, with a price target of $88, after meeting with management during the Connected Fitness facility tour.

Key Takeaways

Analyst Eric Tracy mentioned the main takeaways from the event as:

  1. There seems to be upside to the FY18 Connected Fitness revenue guidance of $200M provided by the company. Tracy expects advertising, subscription services and license to drive upside.
  2. Integration of MapMyFitness, MyFitnessPal, Endomondo, and UA Record appears to be largely progressing as planned. The combined scale of the UA/CF business continues to be a significant competitive advantage.
  3. UA HealthBox provides for a “first stage holistic digital fitness/health ecosystem,” although this will take some time to evolve.
  4. The partnership with IBM Watson could result in more value add for consumers. It is a “significant opportunity for both evolutionary and revolutionary improvements to the app, included streamlined food logging, fitness plans that account for RT local weather conditions, and improved behavioral and performance mgmt,” the analyst wrote.
  5. Connected Fitness should enable Under Armour to “drive disruptive marketing/cross-selling into its 165M+ user base, and build a recommendation engine that is similar to Amazon’s," Trace commented, adding that this would enable company to sell substantially more apparel and footwear globally.

Latest Ratings for UA

Oct 2016Piper JaffrayUpgradesNeutralOverweight
Oct 2016Piper JaffrayUpgradesNeutralOverweight
Oct 2016Wells FargoUpgradesMarket PerformOutperform

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Posted-In: Brean Capital Eric TracyAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas


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