Under Armour's Stock Drops After Downgrade To Rare Underperform Rating

Shares of Under Armour Inc. slumped 2.4% in morning trade Monday, after FBR & Co. turned bearish on the athletic apparel company, citing a brewing price war with rival Nike Inc. at Kohl's Inc. , as well as changing customer preferences. Analyst Susan Anderson cut her rating to a rare underperform from market perform, and slashed her price target to $14, which is 28% below current levels, from $20. Only 1.6% of the companies covered by FBR analyst had underperform ratings. "Our checks show a price war is intensifying between [Nike] and [Under Armour] after UA's entrance into [Kohl's], which is causing [Nike] to defend its turf," Anderson wrote in a note to clients. "Also, a lack of UA footwear innovation, increased competitor innovation--Nike VaporMax--and out footwear survey showing UA is losing consumer resonance could mean lower 2017 footwear growth." The stock has plunged 33% year to date, while Nike shares have rallied 8.8% and the S&P 500 has gained 4.9%.