Why Under Armour Inc (UAA) Stock Is Down Today
Under Armour Inc (NYSE:UAA) shares were falling today as the company was downgraded.
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Wells Fargo & Co (NYSE:WFC) reduced the company’s stock price from $17 to $13, while also lowering its rating for UAA to “Underperform.” Bank analyst Tom Nikic believes the company has some weak areas that could hinder its future growth.
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He said that “the industry has had a remarkable track record of success over the long-term, but with consumers having filled their closets with athleticwear over the past 6-7 years, meaningful distribution issues (bankruptcies, store closures, etc.) and a current ‘lull’ in product innovation, the category appears poised to take a breather for now.”
Nikic added that his previous $17 stock valuation on Under Armour is too high, noting the stock trades 40 to 45 times his fiscal-year 2018 earnings-per-share estimates. The new price target is based on 30X his fiscal 2019 EPS expectation for the company.
Under Armour’s fiscla 2017 EPS estimate is at 37 cents, while its fiscal 2018 EPS fell from 46 to 40 cents, and his fiscal 2019 earnings estimate for the company is at 44 cents per share.
Several financial institutions recently assumed a position in the company, including Aviva PLC, which disclosed an acquisition of 114,196 shares on the company with the Securities & Exchange Commission during Under Armour’s second quarter. The stake is valued at approximately $2.49 million.
Sumitomo Mitsui Trust Holdings Inc. recently acquired a position with Under Armour worth more than $11 milion.
UAA shares declined 2.7% Tuesday.
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