Analyst Looks At Under Armour 'Madness'

In a report published Wednesday, FBR Capital Markets analysts maintained an Outperform rating for Under Armour, Inc UA, while raising the price target from $90 to $92. Visibility into the company's growth has improved with domestic strength and solid international trajectory.

Following the conclusion of the UA Madness series, the analysts have a consolidated view of the company's international and footwear opportunity.

Putting together the analyses of the European, Asia-Pacific, and Latin American athletic apparel and footwear markets, the company is expected to achieve 20 percent international penetration and 18 percent North American footwear penetration by 2018.

In the report FBR Capital Markets noted, "Given the rapid growth in Asia/Pacific (China), we expect the region to exceed Western Europe by 2018 and to be UA’s largest market. We expect international to contribute roughly 6.5 points to total revenue growth in 2015 and 7.5–8 points in 2016–2018, supplementing continued NA growth."

NA footwear growth could contribute 9.5 points to revenue growth in 2015 and 5-6 points in 2016-2018. Growth in this segment is likely to be driven by "running and basketball market growth, increased distribution, and an increase in product/innovation platforms," the analysts said.

Under Armour could generate revenues of $8.9B in 2018, representing 28% revenue growth, and significantly ahead of the consensus of $6.5B. This could position the company well to generate revenues of $10B by 2019.

"Our analysis provides us with confidence that UA can at least post high-20% revenue growth for the next several years (with potential upside tolow-30%) as it continues to earn its status as the next global athletic apparel and footwear brand," the analysts added.