Stifel’s shift to Buy on Under Armour ( NYSE: UAA ) sent shares soaring on Monday.
Equity analyst Jim Duffy said that strong demand and resilient margins were the impetus for a move from Neutral to a Buy rating on the stock. He also raised his price target to $12 from a prior $9.
“Relative inventory management discipline leaves Under Armour with better margin certainty and in a better position to bring newness to market in CY23 and we expect systematic risk from an inventory glut of larger competitors clears by [the second half of 2023],” he told clients on Monday. “With tightening lead-times, we see tailwinds to cash flow in CY23 and believe net cash balances could be >25% of the current market cap.”
Shares of the Maryland-based apparel and footwear company surged 10.07% during the day’s trading on the upgrade. The gain on Monday is the biggest one-day jump for the stock in over a month.
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Why did Under Armour stock surge on Monday? A key analyst upgrade