Sterne Agee CRT Remains Bullish as Under Armour (UA) Announces NBA Partnership and Outdoor Footwear Sees Growth

Sterne Agee CRT reiterated a Buy rating and $120.00 price target on Under Armour, Inc. (NYSE: UA), as outdoor footwear and apparel outpace total company growth. Outdoor performance running footwear is seeing increases of 75%. UA also announced a partnership with NBA. In 2018, UA will become the title partner for the NBA Draft Combine, and beginning this October, UA will become the presenting sponsor of the Jr. NBA.

Analyst Sam Poser commented, "UA is making progress on many fronts. After getting a Spring '16 line review of outdoor footwear and apparel at the Outdoor Retailer (OR) show last week, we are very confident that long-term CAGR of 25%+ is very reasonable. The UA booth was fairly small but busy throughout the show. UA's total outdoor business, including both outdoor performance and blood sports did sales in 2014 of ~$300m, of which blood sports is the large majority. The revenue trajectory of UA's outdoor business is out pacing the company as a whole. Unlike blood sports, outdoor performance footwear is gaining traction more quickly than apparel. Outdoor performance running footwear is seeing increases of 75%."

Poser also added, "UA and the NBA announced this morning a partnership whereby, in 2018, UA will become the title partner for the NBA Draft Combine, and beginning this October, UA will become the presenting sponsor of the Jr. NBA. A new NBA FIT APP will be launched through UA's Connected Fitness platform. We believe that these partnerships with the NBA positions UA to effectively lever its performance heritage into the lifestyle part of the basketball business. We saw a bit of lifestyle basketball emerge with Stephan Curry last season. We expect to learn more about this at the investor day on September 16."

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 $98.75 yesterday.

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