Here's Why Under Armour's 'Scarcity Value' Could Further Increase In 2015

Michael Binetti of UBS on Thursday commented in a note that Under Armour Inc's (NYSE: UA) shares are positioned between two "walls of worry" for investors: 1) the apparel industry is seeing "sluggish growth" and 2) while foreign exchange volatility remains a main concern.

Binetti notes that Under Armour accelerated in the fourth quarter from the third quarter, while adding that Under Armour could be the only company with international exposure that could be viewed as a positive in 2015.

The analyst explains that shares have historically traded based on its Total Addressable Market and in 2015 shares will trade on International growth, helped by the recent acquisition of two fitness apps (Endomondo and MyFitnessPal) allows for instant access to a community of 100 million global athletes. In addition, the apps could further create an opportunity to introduce new international users to the brand.

"With these dynamics guided to trend favorably this year (bolstered by bolted on media impressions through new digital platforms), we believe the market may view Under Armour's stock as an even more scarce asset in 2015," Binetti wrote.

Shares are Neutral rated with a $68 price target based on a 47x estimate of 2016 earnings per share of $1.43.