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Under Armour shares fall on valuation concerns

NEW YORK (AP) -- Shares of Under Armour Inc. fell Wednesday, as the overall market tumbled and an analyst cut his rating for the athletic and outdoor apparel maker, saying that the company's shares may have reached their near-term peak.

THE SPARK: Stifel Nicolaus analyst Jim Duffy lowered his rating for the Baltimore-based Under Armour to "Hold" from "Buy," noting that the company's shares recently passed his $92 price target.

THE BIG PICTURE: Duffy said that after Under Amor released its fiscal fourth-quarter results in January, he expected the company's shares to post strong gains through fiscal 2012, as it reaps the benefits of the operational improvements it made in the second half of fiscal 2011.

But Under Armour stock has surged about 34 percent since then, which could mean that investors have already factored in improvements that haven't taken effect yet, he said.

THE ANALYSIS: "While impressed with long-run brand potential, near-term business trajectory, building management depth, and capacity for margin improvement with new operational disciplines, our preliminary views of fiscal 2013 growth and earnings power suggest upside potential to shares is more limited near term," Duffy wrote in a note to investors.

Duffy said investors should look to pick up Under Armour shares if their price falls below $90, or if the company provides some insights into its fiscal 2013 profit and revenue potential.

Company officials did not immediately return an email seeking comment.

THE SHARES: Down $3.54, or 3.6 percent, to $94.55 in midday trading, after falling as low as $94.25 earlier in the day amid a sharp decline in the broader market. Over the past 52 weeks, Under Armour shares have traded between $52.62 and $99.35. Since the beginning of this year, Under Armour shares have gained about 37 percent.