Dicks Sporting Goods Inc (NYSE: DKS)
reported disappointing first-quarter earnings results Tuesday, prompting UBS to downgrade the stock to a Hold from a Buy
rating.
However, not all voices from the Street took a bearish turn. Jefferies analyst Randal J. Konik sees now as a good opportunity to
buy Under Armour Inc (NYSE: UAA) on Dick’ s
underwhelming first quarter.
Reciprocity In Sports Segment
“UAA is one of the few brands that matters in the athletic space. It has significant opportunity to scale N.A., footwear, int’l,
women’s, and lifestyle LT. With valuation compressed and overly negative sentiment, we see significant upside,” said Konik on
Tuesday.
While comps rose 2.4 percent year over year at Dick’s in the first quarter, it came below previous guidance and Street
expectations. Golf and footwear were bright spots for Dick’s, however, two areas where Under Armour has a significant presence.
Recent markdowns of adidas AG (ADR) (OTC: ADDYY) apparel
against full-price selling for Under Armour
at Dick’s stores was an encouraging sign for Jefferies. With Under Armour’s women’s business recently passing $1 billion, it still
makes up just 30 percent of its overall apparel sales, posing a significant opportunity to scale, according to Jefferies.
“Just as today’s adults grew up with Nike Inc (NYSE: NKE), we believe UAA’s resonance with younger generations will drive brand loyalty
down the road,” added Konik.
Jefferies maintains a Buy rating on Under Armour with a $28 price target.
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Latest Ratings for UAA
| Date |
Firm |
Action |
From |
To |
| Apr 2017 |
Wedbush |
Initiates Coverage On |
|
Neutral |
| Apr 2017 |
FBR Capital |
Downgrades |
Market Perform |
Underperform |
| Mar 2017 |
Jefferies |
Upgrades |
Hold |
Buy |
View More Analyst Ratings for
UAA
View the Latest Analyst Ratings
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