Jefferies Cuts Price Target on Under Armour (UA) to $42; Reiterates Hold
Jefferies maintained a Hold rating on Under Armour, Inc. (NYSE: UA), and cut the price target to $42.00 (from $45.00). UA lowered its 2016 sales and op income outlook, given Sports Authority's move to liquidate instead of restructure. 2016 revenue from Sports Authority is now expected to be $43M, compared to the previous expectation of $163M. Revenue guidance was lowered by $75M from $5B to $4.925B.
Analyst Randal Konik commented, "After the close, UA quantified its exposure to the Sports Authority bankruptcy. We view this event as largely one-time, and believe the brand is still in the early innings of growth. Our main concern here remains high expectations, valuation, and the potential rise of Adidas back into the US market. Maintain Hold, PT to $42."
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Shares of Under Armour, Inc. closed at $37.73 yesterday.