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Piper Jaffray Upgrades Under Armour, Sees Path To Sales Growth

Piper Jaffray Upgrades Under Armour, Sees Path To Sales Growth

One week after its biggest share gain in 10 years, Under Armour Inc (NYSE: UAA) received a sell-side upgrade Monday.  

The Analyst 

Piper Jaffray analyst Erinn Murphy upgraded Under Armour from Neutral to Overweight with a price target raised from $20 to $32.

The Thesis

Under Armour shares are up over 60 percent year-to-date, but Murphy said the company’s sales opportunity is still underappreciated. (See her track record here.) 

“Our view is the favorable industry dynamics, direct-to-consumer mix benefit and white space internationally against a more soundly run company will enable Under Armour to be on a path towards [mid-to-high single digit] sales growth over time,” the analyst said. 

Under Armour made "impressive" mindshare gains in Piper Jaffray’s fall women’s survey, with the retailer ranked as the No. 2 women's brand with 17-percent share.  

The change began when Patrik Frisk was hired as president and COO in July 2017, Murphy said. The executive has led initiatives including an improved go-to-market strategy, meaningfully reduced inventory levels, SKU reduction, a faster and leaner design process, sourcing partner consolidation and lower fixed costs through restructuring, the analyst said. 

Under Armour still has room for improvement from a brand perspective, and the company’s focus will shift toward rebuilding the growth story with a segmented, robust product line, according to Piper Jaffray. 

The Price Action 

Under Armour shares were up 2.15 percent Monday afternoon at $24.21. 

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Photo courtesy of Under Armour. 

Latest Ratings for UAA

May 2021BarclaysUpgradesEqual-WeightOverweight
May 2021Credit SuisseMaintainsNeutral
May 2021Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for UAA
View the Latest Analyst Ratings


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