Sterne Agee CRT Remains Bullish on Under Armour (UA) Following Updated Guidance
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Sterne Agee CRT maintained a Buy rating and $60.00 price target on Under Armour, Inc. (NYSE: UA) as guidance is lowered to reflect TSA bankruptcy. EBIT guidance was reduced from $503M-$507M to $440M-$445M. However, despite the lowered guidance, UA remains a top pick for long-term growth investors.
Analyst Sam Poser commented, "Reiterate Buy. Despite lowering its adjusted FY16 revenue and operating income guidance, UA remains a top pick for long-term growth investors. Last night UA reduced its FY16 revenue and operating income guidance as a result of The Sports Authority's bankruptcy liquidation. UA will incur a one-time impairment charge of ~$23 million in 2Q16, as well as a $120M revenue hit, of which $45M is expected to be recovered in FY16. FY16 EBIT guidance was reduced from $503M-$507M to $440M-$445M. The $75M of reduced FY16 revenue was high in margin. There is likely to be far more color provided on the 2Q16 earnings call in July. We expect the margin to be fully recovered in FY17. Reducing FY16 & FY17 EPS estimates from $0.67 & $0.90 to $0.59 & $0.88."
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 $37.73 yesterday.
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