It has been a very tough year for Under Armour (UAA) (UA). I managed to take advantage of the weakness by shorting the stock but my stance has changed to a neutral one more recently. With the stock down so much and after sales growth entered into negative territory, many analysts who were supporting the stock while I was shorting it started to be increasingly skeptical about Under Armour’s growth prospects and valuation levels. As always, with the timing of a cat crossing the highway. I think October 2017 was the month with the highest number of downgrading estimates for UAA, and the vast majority of ratings on the stock are now “Hold” or “Underperform” ratings. With the sentiment turning negative so fast, UAA is now on my watchlist for a potential contrarian long, if and when the conditions will be favorable.

One of the skeptical views comes from Stifel’s analyst Jim Duffy, who has a Hold rating and a $12 price target on UAA, reiterated after the news that Under Armour’s SVP of Footwear will be leaving the company. Peter Ruppe followed several senior executives after the recent underwhelming results in the footwear business, but I will share thoughts on this topic later in the article.

READ FULL ARTICLE HERE