Janney Montgomery Scott Maintains a 'Neutral' on Under Armour (UA); Lot to Like, But Hurdles Remain

July 25, 2012 8:51 AM EDT
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Price: $25.07 +0.44%

Rating Summary:
    20 Buy, 26 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 18 | Down: 17 | New: 10
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Janney Montgomery Scott maintains a 'Neutral' on Under Armour, Inc. (NYSE: UA) price target of $54.00 (from $52.00).

Analyst, Eric Tracy, said, "We admit some surprise over the stock's reaction (+9%), but believe this is largely reflective of a short squeeze as concerns elevated over excess inventories (and subsequent GM compression) heading into 2Q. To that end, we were encouraged, as efforts to control inventory levels are clearly beginning to bear fruit (inventory growth below sales growth for the first time since 2Q 2010). The company's evolving ecommerce platform was a slight drag in the quarter, however, as conversion rates have been challenged since the company's site refresh. While we expect these to be more transitory in nature, margin pressures (given ecommerce carries above company average margins), combined with increasing mix from footwear (carrying lower margins) potentially limits back-half upside in our view."

FY12 raised $0.02 to $1.18 and FY13 by $0.05 to $1.55.

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 $52.79 yesterday.

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