Shares of Under Armour Inc. were up more than 3% in premarket trading Monday after Stifel analyst Jim Duffy turned bullish on the apparel maker’s stock, upgrading it to buy from neutral. “Relative inventory management discipline leaves Under Armour with better margin certainty and in a better position to bring newness to market in CY23 and we expect systematic risk from an inventory glut of larger competitors clears by 2H,” Duffy wrote in a note to clients. He added that tightening lead times could bring benefits to cash flow next calendar year, helping Under Armour’s net-cash balances potentially exceed 25% of the company’s current market capitalization. The company also has opportunity “to expand beyond athletic performance to address other wearable occasions in a young athlete’s lifestyle,” in Duffy’s view. He upped his price target to $12 from $9 on the stock, which is off 60% over the past 12 months as the S&P 500 has lost 17%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.