Auriga Reiterates a 'Hold' on Under Armour, Inc. (UA); Growth in Profitability Not Expected Until 2H12

Auriga reiterates a 'Hold' on Under Armour, Inc. (NYSE: UA) price target of $70.00.

Auriga analyst says, "UA reported slight upside to Q4 with revenue and EPS. However, UA lowered its 2012 revenue guidance due to bloated inventory levels and a more conservative ordering book from retail partners. Inventory increased 51% as a warm winter led to a slowdown in overall sell through. As excess inventory is moved into the outlet channel and input cost pressures remain high, GM are expected to decline 100+ bpts in 1H. Efficiencies from sourcing and SKU rationalization are expected to allow UA to realize improved profitability in 2H. We would wait on the sidelines until there is further visibility regarding inventory improvement and sourcing efficiencies."

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 $73.40 yesterday.

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