Mizuho Securities Downgrades Under Armour, Inc. (UA) to Neutral Citing Structural Margin Challenges

Mizuho Securities downgraded Under Armour, Inc. (NYSE: UA) from Buy to Neutral with a price target of $32.00 (from $52.00), citing structural margin challenges.

Analyst Betty Chen commented, "We are downgrading UA to Neutral and lowering our estimates and PT to $32 to reflect unexpected margin challenges from a structural change in the business. While management reiterated FY16/FY18 sales targets, we are disappointed by EBIT reduction due to: 1) commentary for flattish gross margins in FY17- FY18 due to category mix, 2) significantly lower than expected margin within footwear, and 3) unexpected plans to invest in talent/infrastructure in order to capitalize on the momentum in footwear and Int’l. Given the delayed profitability trajectory and UA’s premium multiple, we expect the shares to remain range-bound."

For an analyst ratings summary and ratings history on Under Armour, Inc. click here. For more ratings news on Under Armour, Inc. click here.

Shares of Under Armour, Inc. closed at $32.89 yesterday.

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