Pivotal Upgrades Under Armour Due To 'Disconnect Between Reality And Sentiment'

While Under Armour Inc UAA seems to be better positioned now than it was pre-pandemic, this is not reflected in its stock, according to Pivotal Research.

The Under Armour Analyst: Mitch Kummetz upgraded Under Armour's stock from Hold to Buy, while raising the price target from $15 to $20.

The Under Armour Thesis: There seems to be a “disconnect between reality and sentiment” for the company’s stock, Kummetz said.

The analyst mentioned a few reasons for believing that Under Armour is “better off today than before COVID.” The pandemic has boosted athletic demand, “which is a rising tide for UAA."

Moreover, the pandemic had also accelerated the adoption of ecommerce, “which favors apparel/footwear vendors in general,” Kummetz wrote. He also believes the competitive landscape is less ominous than it was before the pandemic.

“While UAA’s shares have had a nice bounce since March, they are basically in line with where they were before COVID, and this price action is worse than the average peer apparel/footwear vendor and much worse than the average peer athletic company,” the analyst wrote in the note.

UAA Price Action: Shares of Under Armour opened Monday's session at $17.56 and traded around $17.17 at the time of publication.