Analysts Bet on Extended Rally for Under Armour Stock

Under Armour stock added more than 31% last week, and analysts see more upside ahead

by Josh Selway

Published on Nov 5, 2018 at 9:15 AM

The shares of Under Armour Inc (NYSE:UAA) are coming off a huge week that saw them jump 31.8% thanks to a top- and bottom-line beat for the third quarter. UAA stock closed the week at $23.70, its highest settlement since late-June, putting it within striking distance of its June 7 52-week high of $24.69. The security is set to gain again this morning, up 2.5% in electronic trading, thanks to a round of bullish analyst attention.

Piper Jaffray is jumping on the UAA bandwagon by upgrading the stock to "overweight" from "neutral," citing the upside potential for future sales compared to tepid investor expectations. The brokerage firm also hiked its price target to $32 from $20. Meanwhile, Stifel upped its own price target to $30 from $27, saying it sees several ways the company can improve profitability and accelerate revenue growth.

To be sure, sentiment is still overly bearish on Under Armour, even as it sports a year-to-date gain of 64%. Just four of the 25 covering brokerage firms recommend buying the equity, and more than 10% of the float is held by short sellers. So as we've noted previously, UAA is an attractive target for bullish traders from a contrarian perspective, given the potential for bull notes and/or a short squeeze situation.

It's a similar setup in the options pits, where there's no sign traders are expecting the shares to keep gaining. Call open interest currently ranks in just the 15th annual percentile, and looking at the top open interest positions on UAA, there are almost no out-of-the-money calls to be found in either the November or December options series.

a schaeffer's exclusive


We're celebrating 38 years with this FREE insider report!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

What's Next for the American Wealth Gap
Porter Stansberry is predicting a major change in the American economic system.
GDP, Consumer Spending Data in Post-Fed Spotlight
Next week will feature the final second-quarter GDP and fresh housing market data
Oversold Pot Stock Catches a Lift
PRVB stock is eyeing its lowest close in months, while IGC stock is set for a big win
What's Next for the American Wealth Gap
Porter Stansberry is predicting a major change in the American economic system.