Under Armour's Stock's Low Price Doesn't Mean It Is Cheap

By Tomi Kilgore Markets MarketWatch Pulse

Shares of Under Armour Inc. slipped 0.4% in afternoon trade Friday, with Instinet analyst Simeon Siegel reiterating his bearish stance ahead of the athletic apparel maker's second-quarter results due out next week. The company is scheduled to reveal its second-quarter report before Tuesday's open, with analysts surveyed by FactSet expecting a second-straight quarterly loss. With the stock shedding 33% so far this year, Siegel said sentiment is already poor, but that's unlikely to change given that investor concerns are growing. "We remain concerned over shares of [Under Armour] due to cautious channel checks and the potential for a shift in the perceived growth [opportunity] may ultimately place a focus on profitability metrics, any of which paint the shares as quite expensive," Siegel wrote in a note to clients. He reiterated his reduce rating and his stock price target at $15, which is 22% below current levels. While Under Armour's stock has tanked this year, rival Nike Inc.'s shares have rallied 15% year to date and the S&P 500 has climbed 10%.

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