UAA - Wells Fargo expects big turnaround for Under Armour

Under Armour ([[UA]], [[UAA]]) is on watch after Wells Fargo moves to an Overweight rating on the stock. "In recent years, we’ve seen several big turnarounds by athletic brands (LULU, Adidas, etc.), and we think UAA is poised to be the next. After years of struggles, we believe that the brand is finally starting to turn (as evidenced by the first positive DTC comp in over 3 years in 3Q), and we believe investors will look toward this stock given its lagged athletic peers significantly YTD," updates analyst Ike Boruchow. Boruchow calls Q3 an important DTC inflection point for Under Armour and thinks the near-term setup is favorable as Q4 and FY21 have both been derisked. "Despite flat revenues in Q3 and only 40bps of margin pressure, they guided to a revenue decline in the low-teens with 650-750bps of margin erosion. We think it’s more likely that they beat this

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Wells Fargo expects big turnaround for Under Armour