2 Sportswear Stocks Rallying on Analyst Attention

Options traders were call-heavy on UAA ahead of the price-target hike

Managing Editor
Dec 14, 2017 at 10:00 AM
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Athletic wear stocks are in focus this morning, including sector peers Under Armour Inc (NYSE:UAA) and Hibbett Sports, Inc. (NASDAQ:HIBB). Each sporting goods stock (as well as blue-chip Nike) received attention from Deutsche Bank ahead of the bell, with the analysts saying their confidence in athleisure is considerably higher heading into 2018. Below, we'll take a look at how UAA and HIBB stocks are reacting today.

UAA Stock Chugs Higher

While Deutsche Bank hiked its price target on UAA stock to $12 from $11, the new target still represents a discount to the equity's current price. Plus, the analysts reiterated a "sell" rating on Under Armour stock, opining that 2018 could be another reset year.

Still, the shares of UAA were last seen up 1% at $13.76 in early trading. The sportswear stock has had a rough year overall, suffering a bear gap in late October after the company slashed its full-year guidance. However, the shares have rallied 20% from their four-year low of $11.40, touched Nov. 6, and yesterday topped their 40-day moving average for the first time in over a month.

Options traders were leaning toward the bulls' camp on Under Armour stock. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows UAA with a 10-day call/put volume ratio of 3.97, ranking in the 92nd  percentile of its annual range. This suggests calls have been bought over puts at a faster-than-usual clip during the past two weeks.

What's more, UAA sports a Schaeffer's put/call open interest ratio (SOIR) of 0.91, which is just 14% higher than all other readings from the past year. This indicates that short-term options traders have rarely been more call-heavy on Under Armour stock in the last 52 weeks.

HIBB Has Doubled Since Its August Lows

Deutsche Bank hiked its price target on HIBB stock to $19 from $16, but again, the new target is lower than the equity's current price. Nevertheless, Hibbett Sports stock is higher, up 1.4% to trade at $21.10, at last check. HIBB has picked up nearly 50% in the fourth quarter, and has more than doubled from its August lows, thanks to a well-received earnings report last month.

Short interest on HIBB rose 24% in the past two reporting periods, and now represents nearly 26% of the stock's total available float. Meanwhile, just two of 12 analysts offer up "buy" or better ratings. Should the shares extend their recent surge, a short squeeze or additional upbeat analyst attention could add fuel to HIBB's fire.

 

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