Morgan Stanley downgraded UAA to "equal weight" from "overweight" in response
Under Armour Inc (NYSE:UAA) just announced Patrik Frisk will step down from his role as CEO on June 1 after only two years, and named COO Colin Browne as interim chief executive, as it conducts an external search for his permanent replacement. The decision, which follows the stock's latest tumble, is attracting analyst attention. In fact, Morgan Stanley downgraded UAA to "equal weight" from "overweight," and cut its price target to $11 from $14. Wedbush followed suit, slashing its price objective to $18 from $20.
Heading into today, 13 of the 18 analysts in coverage carried a "buy" or better rating on UAA. Plus, the 12-month consensus target price of $17.33 is a lofty 80.3% premium to current levels, indicating additional downgrades and/or price-target may be on the horizon for Under Armour stock.
At last check, UAA is down 9.5% to trade at a nearly two-year low of $9.54. The $11.50 level rejected a rally shortly after the security's bear gap earlier this month, with shares now well below their 20-day moving average, which moved in as resistance in early April. Year-to-date, UAA is down 54.8%.
Options bears are targeting the equity today, with 3,337 puts exchanged so far, which is five times the average intraday amount, and more than double the 1,215 calls traded. Most popular is the May 9.50 put, where positions are being opened, followed by the January 2023 7.50-strike put.