D.A. Davidson Reiterates Neutral Rating, Raises Price Target On Under Armour On Stellar 4Q Revenue Growth

In a report published Thursday, D.A. Davidson analyst Andrew Burns reiterated a Neutral rating on Under Armour Inc (NYSE: UA), and raised the price target from $73.00 to $81.00.

In the report, D.A. Davidson noted, "Impressive revenue beat fuels modest EPS upside. UA reported revenue and EPS of $895.2 million and $0.40, compared to consensus of $849.1 million and $0.39, and our estimates of $846.5 million and $0.40. Guidance called for approximately $841 million and ~$0.38. By category, Footwear grew 55% year-over-year (y/y), Apparel grew 30%, and Accessories grew 22%. Direct-to-consumer (DTC) sales grew 27% and represented 38% of total sales. Gross margin contracted 146bp y/y to 49.9%, driven by negative mix shift (90bp – including international outgrowth), a USD FX headwind (20bp), and higher freight costs (20bp). SG&A increased 19.1% to $300.0 million, representing 33.5% percent of sales (vs. 36.9% in 4Q13), primarily reflecting higher incentive compensation in the prior year. Operating margin expanded 192bp to 16.3%."

Under Armour closed on Wednesday at $73.57.