Why Cowen Expects Under Armour To Recover Its Brand Momentum

Why Cowen Expects Under Armour To Recover Its Brand Momentum

The consensus estimates for Under Armour Inc UAA appear conservative through fiscal 2023 given the company’s improving revenue trajectory, gross margin expansion, and mix shift toward direct-to-consumers, according to Cowen.

The Under Armour Analyst: John Kernan upgraded Under Armour from Market Perform to Outperform and raised the price target from $17 to $23.

The Under Armour Thesis: The company’s prospects have become brighter with its expansion in Asia, which is its highest gross margin segment, and potential upside to planned restructuring-related savings, Kernan said in the upgrade note.

“Our recent checks suggest improved wholesale sell through at key U.S. wholesale sporting goods partners with lean inventory levels. We view implied Q4:20E guidance on revenue and EPS as conservative,” the analyst said.

“We anticipate a recovery in brand momentum that is above consensus estimates into FY22,” the analyst further wrote.

Cowen raised its earnings estimates for fiscal 2021 and 2022 from 12 cents to 21 cents per share and from 31 cents to 42 cents per share, respectively, significantly higher than Street expectations of 13 cents per share and 29 cents per share.

UAA Price Action: Shares of Under Armour were down 1.23% at $18.40 at last check Tuesday. 

Photo: Under Armour.

Posted In: CowenJohn KernanretailAnalyst ColorUpgradesPrice TargetAnalyst Ratings

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.