Piper Jaffray Recommends Buying Under Armour (UA) on This Morning's Weakness
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Shares of Under Armour, Inc. (NYSE: UA) are down 15% in pre-open trade after the company provided a disappointing outlook. Piper Jaffray analyst Erinn Murphy, however, believes the sell-off is overdone and is recommending investors buy on weakness.
Murphy notes: "In the CFO prepared comments which were published, the company indicated FY17 and FY18 sales will be in the low-20% range and maintained its $7.5B 2018 sales guidance provided at the analyst day. That said, operating income growth is now planned to grow mid-teens for FY17 and FY18. This implies EBIT dollars in the low-$600M range by 2018 vs. the company's prior goal of $800M provided at the analyst day. The company is focused on investments in DTC (mobile, factory house footprint) footwear, new category growth (UAS) & international. In addition, mgmt. indicated that growth in apparel would be below the 20% rate indicated at their analyst day."
She commented, "While this is clearly below our expectations, we believe the sell-off in the stock is overdone and would be buyers on weakness."
Piper Jaffray Overweight price target of $44.00
Shares of Under Armour, Inc. closed at $37.90 yesterday.
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Related EntitiesPiper Jaffray, Erinn Murphy, Pre Market Movers
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