Under Armour Inc.'s shares fell Monday after a Susquehanna analyst lowered his rating on the athletic clothing, shoe and equipment company.
THE SPARK: Christopher Svezia of Susquehanna Financial Group cut Under Armour's rating to "Neutral" from "Positive." He said in a research note that he is confident in the retailer's long-term growth, but a recent run-up in its stock price makes it less attractive as an investment.
THE BIG PICTURE: Under Armour, based in Baltimore, made its name through compression clothing for athletes. But its product line has expanded over the years into t-shirts, shoes and more. It faces tough competition from brands like Nike and Adidas.
THE ANALYSIS: Svezia said that over the long term, he expects the company will see opportunities in women's clothing, footwear, overseas and direct-to-consumer. The analyst also says Under Armour will benefit from its pipeline of innovative products.
But the analyst says the market's near-term expectations for the stock are already priced in. The company's share price, as of Friday's close, is up 62 percent year-to-date.
Separately, two Cowen and Co. analysts, Fay Landes and Tal Lev, said Monday that their consumer tracking survey shows that the brand may have lost some of its "cool" factor among young men. They said the overall brand perception for Under Armour has remained relatively flat over time. However, an increasing percentage of young women find the brand cool, while a decreasing percentage of young men do. They also noted that an increasing percentage of young men find it uncool.
SHARE ACTION: Shares of Under Armour fell $2.76, or 3.5 percent, to $75.74 in afternoon trading amid a broader market uptick. Its shares remain at the upper end of its 52-week trading range of $44.32 to $81.64.