Deutsche Bank Downgrades Under Armour, Inc. (UA) to Hold

October 26, 2016 6:50 AM EDT
Get Alerts UA Hot Sheet
Price: $25.41 --0%

Rating Summary:
    19 Buy, 26 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 20 | Down: 29 | New: 22
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Deutsche Bank downgraded Under Armour, Inc. (NYSE: UA) from Buy to Hold with a price target of $32.00 (from $50.00). The change follows updated long term guidance.

"After providing 3Y CAGR plans at its Sept. ‘15 Investor Day of 25% revs./23% EBIT, mgmt. yesterday reduced 2017/18 rev. growth to ‘low 20%’, and surprisingly, EBIT growth to ‘mid-teen’. While ~22% rev. growth is robust, relative to our forecast (we already had flat GM) mgmt. is taking a more aggressive pace with investments. Candidly, none of the expense initiatives about which mgmt. spoke were a surprise; but they are being implemented faster than expected. In our view, this changes the out-year ~15% l-t OM glidepath from ‘relatively stable’ to down meaningfully (-110bp through 2018 to 7.9%) before reverting higher. With UA trading at 48x ’17 EPS, this newlyintroduced ‘V-shaped’ profit profile limits outsized multiples and puts investors at bay for EPS reacceleration. D/G balances UA’s now slower medium term profit trajectory and muted multiple expansion with strong global share gains," said analyst Dave Weiner.

For an analyst ratings summary and ratings history on Under Armour, Inc. click here. For more ratings news on Under Armour, Inc. click here.

Shares of Under Armour, Inc. closed at $32.89 yesterday.



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