Mizuho Securities Raises Price Target as Strong Sales Drive 1Q EPS Beat at Under Armour (UA)
Mizuho Securities reiterated a Buy rating on Under Armour, Inc. (NYSE: UA), and raised the price target to $52.00 (from $47.50), following the company's 1Q earnings report. UA reported EPS of $0.04, above consensus’ $0.02, driven by sales growth of +30.2%. UA raised FY16 targets and now expects sales growth of ~26% to $5bn in sales and EBIT dollar growth of ~23-24% or $503-507mm driven by opportunities across all areas of the business.
Analyst Betty Chen commented, "We are raising our PT to $52 and reiterating our Buy rating on UA as a 1Q beat and raised FY16 guidance demonstrates market share gains in core apparel and footwear categories. Importantly, BTE 2Q outlook for +H20s sales growth on footwear unit volume/ASP gains and Int’l momentum coupled with flattish gross margin, should alleviate inventory concerns and restore confidence in the health of the athletic sector. Looking forward, we believe UA is in the nascent stages of expansion within footwear, women’s, and Int’l with improving profitability and thus deserves a premium valuation."
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Shares of Under Armour, Inc. closed at $43.95 yesterday.