Under Armour Stock Picks Up Rare Bull Note

The majority of analysts are still skeptical of UAA

by Patrick Martin

Published on Jul 25, 2019 at 9:49 AM

The shares of Under Armour Inc (NYSE:UAA) are up 0.5% to trade at $27.51 today, after Telsey Advisory Group upped its price target on the athletic apparel name to $25 from $22. Now, Under Armour stock is heading toward its third straight win. The shares have carved out a channel of higher highs and lows all year, with recent pullbacks finding support at their 30-day moving average. Year-to-date, UAA is up 55%, and just yesterday nabbed a two-year high of $27.72.

More bull notes could certainly keep the wind at the equity's back. Of the 21 brokerages covering the security, 14 rate it a "hold" or worse, while its consensus 12-month price target of $23.27 is a 15% discount to last night's closing perch at $27.34. 

The equity is ripe for a short squeeze, too. Short interest increased by 20% in the most recent reporting period to 38.65 million shares, the most since October. This accounts for  a hefty 20.7% of UAA's total available float, and eight days' worth of pent-up buying power, at the stock's average pace of trading.

In the options pits, there is a distinct bearish bias that could also fuel upside for UAA. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.22 ranks in the elevated 76th annual percentile, meaning puts have been bought to open over calls at a quicker-than-usual clip. A shift in sentiment could create tailwinds for the stock.


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