UBS Says Under Armour Has 'Right Growth Algorithm'

In a report published Wednesday, UBS analyst Michael Binetti maintained a Neutral rating and $53.00 price target on

following recent meetings with management. In his “Notes from the Road,” Binetti wrote, “In coming years, we believe UA has the right growth algorithm with traction building from multiple sales catalysts and conservative LT op margin target (12% by '16) to enable EPS upside—even if upside is plowed-back into investments.” UBS highlighted Under Armour's international growth, with international revenues up more than 79 percent year-over-year. Binetti reported that the company has the opportunity to open a “high-profile store in a key Europe market” to better showcase the company's assortment with international awareness growing. The analyst noted 50 percent of sales at the New York City store are to international customers. Binetti sees near-term opportunity for Under Armour's women business following key hires expanding distribution. The analyst added, “while footwear is only 13% of mix, we believe a more complete assortment of products and price points in the higher margin running category is resonating with the consumer—which we est will continue to drive consistent growth and increased brand penetration in the NT.” Shares of Under Armour gained as much as 2.76 percent to $48.42 in Thursday's trading. Shares closed at $47.89 for the day.