Shares of Baltimore-based athletic apparel maker Under Armour Inc. has rocketed by 15 percent in the past three months and has advanced by 65 percent this year. Its shares are on track for their best annual increase since 2013.
Craig Johnson, Chief Market Technician at Piper Jaffray, sees its stock scaling even higher.
“The setup on Under Armour looks great right now on the charts. We’ve got a longer-term kind of bottoming formation setting up here. Technicians will call this an inverted head-and-shoulders bottom and … it suggests a measured price objective up into the high-$30s.” – Craig Johnson, Chief Market Technician, Piper Jaffray
An inverted head-and-shoulders pattern — marked by a low, a lower low and a higher low — is a bullish signal that typically suggests the end of a downtrend. Johnson also said declining short interest in the stock gives him confidence in the strength of the rally.
However, Under Armour is still overvalued even under optimistic assumptions. It has taken a beating over the last 3 years due to stalled growth in its North America business. The stock has rallied in 2018 on the back of some stabilization in the business. However, the athletic apparel retailer is still overvalued even under optimistic assumptions – I do not recommend a buy.
The firm announced that it will hold an investor meeting on Dec. 12, 2018. At the event, Chairman & Chief Executive Officer Kevin Plank, President & Chief Operating Officer Patrik Frisk, Chief Financial Officer David Bergman and other Under Armour executives will provide an overview of the company’s long-term strategy, financial outlook and key initiatives to deliver sustainable, profitable growth and shareholder value.
Under Armour is a leading inventor, marketer and distributor of branded performance athletic apparel, footwear and accessories.