Analyst: Target Under Armour Stock in 2022

Call traders have been targeting the stock

Assistant Editor
Jan 4, 2022 at 12:56 PM
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Though apparel retailer Under Armour Inc (NYSE:UAA) has pulled back slightly from this morning's gains, it was still last seen up 2% to trade at $21.67, following a bull note from Baird. The firm upgraded UAA to "outperform" from "neutral," calling the equity a top investing idea for 2022. The analyst affirmed its $32 price target, citing the company's potential to benefit from a cyclical recovery in earnings.

There's still plenty of room for further upgrades amongst the brokerage bunch, which could lift Under Armour stock even higher on the charts. Of the 30 analysts in coverage, 15 still carry a "hold" or worse rating.

There's even more pessimism left to be unwound from short sellers. While short interest has taken a 22% haircut over the last month, the 11.78 million shares sold short still represent a healthy 6.3% of the stock's available float.

Elsewhere, options traders have targeted calls with enthusiasm over the last two weeks. This is according to UAA's 10-day call/put volume ratio of 22.35 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 95% of readings from the past 12 months. This indicates a much greater-than-usual appetite for calls of late. 

Now could be an ideal opportunity to weigh in on the stock's next move with options. This is per UAA's Schaeffer's Volatility Index (SVI) of 37%, which sits in the low 7th percentile of its 12-month range -- suggesting volatility expectations are unusually low right now.

On the charts, the equity is facing off with the 260-day moving average, a trendline that UAA traded below for the latter half of December. In addition, a ceiling seems to have formed at the $22 area. Year-over-year, Under Armour stock sports a 25% lead. 

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