UBS Reaffirms Buy on Under Armour (UA), Sees Turnaround Potential

Under Armour, Inc. (NYSE:UA) is one of the 10 Best US Penny Stocks to Buy. On January 1, UBS reaffirmed its Buy rating on Under Armour, Inc. (NYSE:UA) with a price target of $8. UBS sees the company as a turnaround opportunity and believes that future performance could exceed market expectations.

The investment firm projects that Under Armour, Inc. (NYSE:UA) could achieve a 25% compound annual growth rate in earnings per share over the next five years. UBS expects the company to drive this growth through considerable innovation and better leverage of the brand name. The firm believes that these should lead to improvement in Under Armour, Inc.’s (NYSE:UA) North American revenue growth rate, which could help lift the company’s valuation over time.

UBS also highlighted findings from its Evidence Lab’s 11th annual global athletic wear survey, which shows that Under Armour, Inc. (NYSE:UA) is one of the most recognized and well-liked athletic wear brands in the world. It belongs in the same category as brands such as Lululemon, Jordan, Adidas, Puma, On, Hoka, Skechers, and New Balance.

The investment firm pointed out that the average market value of publicly traded standalone brands in this group is about $19 billion, compared with Under Armour, Inc.’s (NYSE:UA) market capitalization of just $2.1 billion. This shows that the valuation gap between the company and its competitors is too large.

Under Armour, Inc. (NYSE:UA) is an American sportswear company that designs, markets, and distributes branded athletic performance apparel, footwear, and accessories.

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Disclosure: None. This article is originally published at Insider Monkey.